Question:
What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?
Correct Answer
$4446
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 7% × 2
= $3900 ×7/100 × 2
= 3900 × 7 × 2/100
= 27300 × 2/100
= 54600/100
= $546
Thus, Simple Interest = $546
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 = $3900 + $546
= $4446
Thus, Amount to be paid = $4446 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 = $3900
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3900 + ($3900 × 7% × 2)
= $3900 + ($3900 ×7/100 × 2)
= $3900 + (3900 × 7 × 2/100)
= $3900 + (27300 × 2/100)
= $3900 + (54600/100)
= $3900 + $546 = $4446
Thus, Amount (A) to be paid = $4446 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 $3900, the simple interest in 1 year
= 7/100 × 3900
= 7 × 3900/100
= 27300/100 = $273
Thus, simple interest for 1 year = $273
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $273 × 2 = $546
Thus, Simple Interest (SI) = $546
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $546
= $4446
Thus, Amount to be paid = $4446 Answer
Similar Questions
(1) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 3 years.
(2) If Karen borrowed $3950 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 7 years.
(4) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 3 years.
(5) Sandra had to pay $4984 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 10% simple interest?
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 3 years.
(8) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 5% simple interest?
(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?