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) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 3 years.
(2) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 4 years.
(4) How much loan did Ronald borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9000 to clear it?
(5) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.
(6) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.
(8) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.