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) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 8 years.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.
(4) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10168 to clear the loan, then find the time period of the loan.
(5) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10595 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 8 years.
(7) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $6720 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 6% simple interest?
(9) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 8 years.
(10) In how much time a principal of $3200 will amount to $3520 at a simple interest of 2% per annum?