Question:
What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 7% simple interest?
Correct Answer
$3933
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 7% × 2
= $3450 ×7/100 × 2
= 3450 × 7 × 2/100
= 24150 × 2/100
= 48300/100
= $483
Thus, Simple Interest = $483
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 = $3450 + $483
= $3933
Thus, Amount to be paid = $3933 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 = $3450
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3450 + ($3450 × 7% × 2)
= $3450 + ($3450 ×7/100 × 2)
= $3450 + (3450 × 7 × 2/100)
= $3450 + (24150 × 2/100)
= $3450 + (48300/100)
= $3450 + $483 = $3933
Thus, Amount (A) to be paid = $3933 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 $3450, the simple interest in 1 year
= 7/100 × 3450
= 7 × 3450/100
= 24150/100 = $241.5
Thus, simple interest for 1 year = $241.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $241.5 × 2 = $483
Thus, Simple Interest (SI) = $483
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $483
= $3933
Thus, Amount to be paid = $3933 Answer
Similar Questions
(1) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(2) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?
(3) Anthony had to pay $4945 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(5) How much loan did Jacob borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8800 to clear it?
(6) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(9) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.