Question:
What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 7% simple interest?
Correct Answer
$4560
Solution And Explanation
Solution
Given,
Principal (P) = $4000
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) = $4000 × 7% × 2
= $4000 ×7/100 × 2
= 4000 × 7 × 2/100
= 28000 × 2/100
= 56000/100
= $560
Thus, Simple Interest = $560
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 = $4000 + $560
= $4560
Thus, Amount to be paid = $4560 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 = $4000
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 2 years
Thus, Amount (A)
= $4000 + ($4000 × 7% × 2)
= $4000 + ($4000 ×7/100 × 2)
= $4000 + (4000 × 7 × 2/100)
= $4000 + (28000 × 2/100)
= $4000 + (56000/100)
= $4000 + $560 = $4560
Thus, Amount (A) to be paid = $4560 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 $4000, the simple interest in 1 year
= 7/100 × 4000
= 7 × 4000/100
= 28000/100 = $280
Thus, simple interest for 1 year = $280
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $280 × 2 = $560
Thus, Simple Interest (SI) = $560
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $560
= $4560
Thus, Amount to be paid = $4560 Answer
Similar Questions
(1) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 7% simple interest?
(2) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 3 years.
(4) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(5) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 5% simple interest for 8 years.
(7) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 4 years.
(8) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 4% simple interest?
(9) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 8 years.
(10) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7599 to clear the loan, then find the time period of the loan.