Question:
Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 3 years.
Correct Answer
$4305.5
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 3% × 3
= $3950 ×3/100 × 3
= 3950 × 3 × 3/100
= 11850 × 3/100
= 35550/100
= $355.5
Thus, Simple Interest = $355.5
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 = $3950 + $355.5
= $4305.5
Thus, Amount to be paid = $4305.5 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 = $3950
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $3950 + ($3950 × 3% × 3)
= $3950 + ($3950 ×3/100 × 3)
= $3950 + (3950 × 3 × 3/100)
= $3950 + (11850 × 3/100)
= $3950 + (35550/100)
= $3950 + $355.5 = $4305.5
Thus, Amount (A) to be paid = $4305.5 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 $3950, the simple interest in 1 year
= 3/100 × 3950
= 3 × 3950/100
= 11850/100 = $118.5
Thus, simple interest for 1 year = $118.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $118.5 × 3 = $355.5
Thus, Simple Interest (SI) = $355.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $355.5
= $4305.5
Thus, Amount to be paid = $4305.5 Answer
Similar Questions
(1) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 7 years.
(3) If Joshua paid $5684 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?
(6) Christopher had to pay $4240 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) 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.
(8) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(9) Richard had to pay $4032 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.