Question:
What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?
Correct Answer
$4161
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 7% × 2
= $3650 ×7/100 × 2
= 3650 × 7 × 2/100
= 25550 × 2/100
= 51100/100
= $511
Thus, Simple Interest = $511
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 = $3650 + $511
= $4161
Thus, Amount to be paid = $4161 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 = $3650
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3650 + ($3650 × 7% × 2)
= $3650 + ($3650 ×7/100 × 2)
= $3650 + (3650 × 7 × 2/100)
= $3650 + (25550 × 2/100)
= $3650 + (51100/100)
= $3650 + $511 = $4161
Thus, Amount (A) to be paid = $4161 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 $3650, the simple interest in 1 year
= 7/100 × 3650
= 7 × 3650/100
= 25550/100 = $255.5
Thus, simple interest for 1 year = $255.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $255.5 × 2 = $511
Thus, Simple Interest (SI) = $511
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $511
= $4161
Thus, Amount to be paid = $4161 Answer
Similar Questions
(1) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7602 to clear the loan, then find the time period of the loan.
(2) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 3% simple interest?
(3) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 8 years.
(4) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(5) If Joseph paid $4144 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(7) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 10% simple interest?
(8) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 7 years.
(9) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
(10) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.