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 Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?
(2) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 9% simple interest?
(4) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7216 to clear the loan, then find the time period of the loan.
(5) If Christopher paid $4480 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(7) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 8 years.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 4 years.
(10) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $11524 to clear the loan, then find the time period of the loan.