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) If Emily paid $5510 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
(4) If Sandra paid $5162 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) How much loan did Margaret borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7620 to clear it?
(6) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 7 years.
(7) Susan had to pay $4088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 7 years.
(10) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 4 years.