Question:
Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
Correct Answer
$4114
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 7% × 3
= $3400 ×7/100 × 3
= 3400 × 7 × 3/100
= 23800 × 3/100
= 71400/100
= $714
Thus, Simple Interest = $714
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 = $3400 + $714
= $4114
Thus, Amount to be paid = $4114 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 = $3400
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3400 + ($3400 × 7% × 3)
= $3400 + ($3400 ×7/100 × 3)
= $3400 + (3400 × 7 × 3/100)
= $3400 + (23800 × 3/100)
= $3400 + (71400/100)
= $3400 + $714 = $4114
Thus, Amount (A) to be paid = $4114 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 $3400, the simple interest in 1 year
= 7/100 × 3400
= 7 × 3400/100
= 23800/100 = $238
Thus, simple interest for 1 year = $238
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $238 × 3 = $714
Thus, Simple Interest (SI) = $714
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $714
= $4114
Thus, Amount to be paid = $4114 Answer
Similar Questions
(1) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 9% simple interest?
(2) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 4 years.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 4 years.
(6) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 7% simple interest?
(7) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.
(9) If Jessica borrowed $3750 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.