Question:
What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 7% simple interest?
Correct Answer
$4047
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 7% × 2
= $3550 ×7/100 × 2
= 3550 × 7 × 2/100
= 24850 × 2/100
= 49700/100
= $497
Thus, Simple Interest = $497
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 = $3550 + $497
= $4047
Thus, Amount to be paid = $4047 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 = $3550
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3550 + ($3550 × 7% × 2)
= $3550 + ($3550 ×7/100 × 2)
= $3550 + (3550 × 7 × 2/100)
= $3550 + (24850 × 2/100)
= $3550 + (49700/100)
= $3550 + $497 = $4047
Thus, Amount (A) to be paid = $4047 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 $3550, the simple interest in 1 year
= 7/100 × 3550
= 7 × 3550/100
= 24850/100 = $248.5
Thus, simple interest for 1 year = $248.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $248.5 × 2 = $497
Thus, Simple Interest (SI) = $497
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $497
= $4047
Thus, Amount to be paid = $4047 Answer
Similar Questions
(1) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 3% simple interest?
(3) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?
(5) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8400 to clear it?
(6) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(7) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?
(8) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.
(9) If Michael paid $3960 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 will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?