Question:
What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 7% simple interest?
Correct Answer
$4218
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 7% × 2
= $3700 ×7/100 × 2
= 3700 × 7 × 2/100
= 25900 × 2/100
= 51800/100
= $518
Thus, Simple Interest = $518
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 = $3700 + $518
= $4218
Thus, Amount to be paid = $4218 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 = $3700
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3700 + ($3700 × 7% × 2)
= $3700 + ($3700 ×7/100 × 2)
= $3700 + (3700 × 7 × 2/100)
= $3700 + (25900 × 2/100)
= $3700 + (51800/100)
= $3700 + $518 = $4218
Thus, Amount (A) to be paid = $4218 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 $3700, the simple interest in 1 year
= 7/100 × 3700
= 7 × 3700/100
= 25900/100 = $259
Thus, simple interest for 1 year = $259
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $259 × 2 = $518
Thus, Simple Interest (SI) = $518
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $518
= $4218
Thus, Amount to be paid = $4218 Answer
Similar Questions
(1) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 7 years.
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.
(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 3 years.
(4) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 7% simple interest?
(5) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 3 years.
(6) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 7% simple interest?
(7) If Paul paid $5452 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(9) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 8 years.