Question:
Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 3 years.
Correct Answer
$3710
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 2%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3500 × 2% × 3
= $3500 ×2/100 × 3
= 3500 × 2 × 3/100
= 7000 × 3/100
= 21000/100
= $210
Thus, Simple Interest = $210
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 = $3500 + $210
= $3710
Thus, Amount to be paid = $3710 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 = $3500
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3500 + ($3500 × 2% × 3)
= $3500 + ($3500 ×2/100 × 3)
= $3500 + (3500 × 2 × 3/100)
= $3500 + (7000 × 3/100)
= $3500 + (21000/100)
= $3500 + $210 = $3710
Thus, Amount (A) to be paid = $3710 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3500, the simple interest in 1 year
= 2/100 × 3500
= 2 × 3500/100
= 7000/100 = $70
Thus, simple interest for 1 year = $70
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $70 × 3 = $210
Thus, Simple Interest (SI) = $210
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $210
= $3710
Thus, Amount to be paid = $3710 Answer
Similar Questions
(1) What amount will be due after 2 years if John borrowed a sum of $3100 at a 9% simple interest?
(2) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 6% simple interest?
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 8 years.
(5) If Emily paid $5700 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 7 years.
(7) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(8) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 4 years.
(10) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9412 to clear the loan, then find the time period of the loan.