Question:
What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?
Correct Answer
$4332
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 7% × 2
= $3800 ×7/100 × 2
= 3800 × 7 × 2/100
= 26600 × 2/100
= 53200/100
= $532
Thus, Simple Interest = $532
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 = $3800 + $532
= $4332
Thus, Amount to be paid = $4332 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 = $3800
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3800 + ($3800 × 7% × 2)
= $3800 + ($3800 ×7/100 × 2)
= $3800 + (3800 × 7 × 2/100)
= $3800 + (26600 × 2/100)
= $3800 + (53200/100)
= $3800 + $532 = $4332
Thus, Amount (A) to be paid = $4332 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 $3800, the simple interest in 1 year
= 7/100 × 3800
= 7 × 3800/100
= 26600/100 = $266
Thus, simple interest for 1 year = $266
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $266 × 2 = $532
Thus, Simple Interest (SI) = $532
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $532
= $4332
Thus, Amount to be paid = $4332 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(2) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 3 years.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 7 years.
(4) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(5) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.
(8) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(9) If William paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.