Question:
Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 3 years.
Correct Answer
$3751
Solution And Explanation
Solution
Given,
Principal (P) = $3100
Rate of Simple Interest (SI) = 7%
Time (t) = 3 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) = $3100 × 7% × 3
= $3100 ×7/100 × 3
= 3100 × 7 × 3/100
= 21700 × 3/100
= 65100/100
= $651
Thus, Simple Interest = $651
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 = $3100 + $651
= $3751
Thus, Amount to be paid = $3751 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 = $3100
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3100 + ($3100 × 7% × 3)
= $3100 + ($3100 ×7/100 × 3)
= $3100 + (3100 × 7 × 3/100)
= $3100 + (21700 × 3/100)
= $3100 + (65100/100)
= $3100 + $651 = $3751
Thus, Amount (A) to be paid = $3751 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 $3100, the simple interest in 1 year
= 7/100 × 3100
= 7 × 3100/100
= 21700/100 = $217
Thus, simple interest for 1 year = $217
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $217 × 3 = $651
Thus, Simple Interest (SI) = $651
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $651
= $3751
Thus, Amount to be paid = $3751 Answer
Similar Questions
(1) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 7 years.
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 4 years.
(3) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 6% simple interest?
(4) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 7% simple interest?
(5) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 9% simple interest.
(7) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) If Karen paid $4740 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?