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) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(2) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 4 years.
(4) In how much time a principal of $3200 will amount to $3840 at a simple interest of 4% per annum?
(5) How much loan did Michelle borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8340 to clear it?
(6) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7208 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
(9) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 3 years.
(10) If Jessica paid $4050 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.