Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 3 years.
Correct Answer
$4196.5
Solution And Explanation
Solution
Given,
Principal (P) = $3850
Rate of Simple Interest (SI) = 3%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3850 × 3% × 3
= $3850 ×3/100 × 3
= 3850 × 3 × 3/100
= 11550 × 3/100
= 34650/100
= $346.5
Thus, Simple Interest = $346.5
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 = $3850 + $346.5
= $4196.5
Thus, Amount to be paid = $4196.5 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 = $3850
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $3850 + ($3850 × 3% × 3)
= $3850 + ($3850 ×3/100 × 3)
= $3850 + (3850 × 3 × 3/100)
= $3850 + (11550 × 3/100)
= $3850 + (34650/100)
= $3850 + $346.5 = $4196.5
Thus, Amount (A) to be paid = $4196.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3850, the simple interest in 1 year
= 3/100 × 3850
= 3 × 3850/100
= 11550/100 = $115.5
Thus, simple interest for 1 year = $115.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $115.5 × 3 = $346.5
Thus, Simple Interest (SI) = $346.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $346.5
= $4196.5
Thus, Amount to be paid = $4196.5 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(2) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 9% simple interest?
(3) What amount does William have to pay after 5 years if he takes a loan of $3500 at 10% simple interest?
(4) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 3 years.
(5) In how much time a principal of $3100 will amount to $3348 at a simple interest of 4% per annum?
(6) What amount does David have to pay after 6 years if he takes a loan of $3400 at 6% simple interest?
(7) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(8) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.
(9) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?