Question:
Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 3 years.
Correct Answer
$4235
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 7% × 3
= $3500 ×7/100 × 3
= 3500 × 7 × 3/100
= 24500 × 3/100
= 73500/100
= $735
Thus, Simple Interest = $735
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 + $735
= $4235
Thus, Amount to be paid = $4235 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) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3500 + ($3500 × 7% × 3)
= $3500 + ($3500 ×7/100 × 3)
= $3500 + (3500 × 7 × 3/100)
= $3500 + (24500 × 3/100)
= $3500 + (73500/100)
= $3500 + $735 = $4235
Thus, Amount (A) to be paid = $4235 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 $3500, the simple interest in 1 year
= 7/100 × 3500
= 7 × 3500/100
= 24500/100 = $245
Thus, simple interest for 1 year = $245
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $245 × 3 = $735
Thus, Simple Interest (SI) = $735
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $735
= $4235
Thus, Amount to be paid = $4235 Answer
Similar Questions
(1) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 7 years.
(2) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.
(3) 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.
(4) Calculate the amount due if William borrowed a sum of $3500 at 8% simple interest for 3 years.
(5) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 7 years.
(6) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 5% simple interest?
(7) In how much time a principal of $3000 will amount to $3360 at a simple interest of 4% per annum?
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(9) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9360 to clear it?
(10) If Michael paid $3696 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.