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) Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 3 years.
(2) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $8704 to clear the loan, then find the time period of the loan.
(3) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 9% simple interest?
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 8 years.
(5) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 3% simple interest?
(6) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(8) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 8% simple interest?
(9) If Daniel paid $4920 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 9% simple interest?