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) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10452 to clear the loan, then find the time period of the loan.
(2) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8094 to clear the loan, then find the time period of the loan.
(3) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.
(5) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 7 years.
(7) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.
(9) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(10) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.