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 after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(2) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(3) In how much time a principal of $3050 will amount to $3812.5 at a simple interest of 5% per annum?
(4) If Sandra paid $4984 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 8 years.
(6) Joshua had to pay $5635 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 3 years.
(8) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6683 to clear the loan, then find the time period of the loan.
(9) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(10) What amount does James have to pay after 6 years if he takes a loan of $3000 at 4% simple interest?