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) How much loan did John borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6240 to clear it?
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 3 years.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 4 years.
(4) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 10% simple interest?
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.
(7) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(8) How much loan did James borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5750 to clear it?
(9) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 4% simple interest?