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 Christopher borrowed a sum of $4000 at 7% simple interest for 3 years.
(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(3) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6407 to clear the loan, then find the time period of the loan.
(4) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8892 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 4 years.
(6) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.
(7) In how much time a principal of $3000 will amount to $3750 at a simple interest of 5% per annum?
(8) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 2% simple interest?
(9) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(10) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.