Question:
What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?
Correct Answer
$3876
Solution And Explanation
Solution
Given,
Principal (P) = $3400
Rate of Simple Interest (SI) = 7%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3400 × 7% × 2
= $3400 ×7/100 × 2
= 3400 × 7 × 2/100
= 23800 × 2/100
= 47600/100
= $476
Thus, Simple Interest = $476
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $476
= $3876
Thus, Amount to be paid = $3876 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3400
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3400 + ($3400 × 7% × 2)
= $3400 + ($3400 ×7/100 × 2)
= $3400 + (3400 × 7 × 2/100)
= $3400 + (23800 × 2/100)
= $3400 + (47600/100)
= $3400 + $476 = $3876
Thus, Amount (A) to be paid = $3876 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3400, the simple interest in 1 year
= 7/100 × 3400
= 7 × 3400/100
= 23800/100 = $238
Thus, simple interest for 1 year = $238
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $238 × 2 = $476
Thus, Simple Interest (SI) = $476
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $476
= $3876
Thus, Amount to be paid = $3876 Answer
Similar Questions
(1) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 10% simple interest?
(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 3 years.
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.
(4) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $9400 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 5% simple interest?
(6) How much loan did Ronald borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8625 to clear it?
(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 7 years.
(8) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 8% simple interest for 7 years.
(10) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 9% simple interest?