Question:
What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 7% simple interest?
Correct Answer
$4503
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 7% × 2
= $3950 ×7/100 × 2
= 3950 × 7 × 2/100
= 27650 × 2/100
= 55300/100
= $553
Thus, Simple Interest = $553
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 = $3950 + $553
= $4503
Thus, Amount to be paid = $4503 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 = $3950
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $3950 + ($3950 × 7% × 2)
= $3950 + ($3950 ×7/100 × 2)
= $3950 + (3950 × 7 × 2/100)
= $3950 + (27650 × 2/100)
= $3950 + (55300/100)
= $3950 + $553 = $4503
Thus, Amount (A) to be paid = $4503 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 $3950, the simple interest in 1 year
= 7/100 × 3950
= 7 × 3950/100
= 27650/100 = $276.5
Thus, simple interest for 1 year = $276.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $276.5 × 2 = $553
Thus, Simple Interest (SI) = $553
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $553
= $4503
Thus, Amount to be paid = $4503 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 7 years.
(3) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 4% simple interest?
(4) If Paul paid $5264 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 4 years.
(6) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 10% simple interest?
(7) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 3 years.
(9) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.
(10) How much loan did Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?