Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.
Correct Answer
$3416
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 4%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3050 × 4% × 3
= $3050 ×4/100 × 3
= 3050 × 4 × 3/100
= 12200 × 3/100
= 36600/100
= $366
Thus, Simple Interest = $366
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 = $3050 + $366
= $3416
Thus, Amount to be paid = $3416 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 = $3050
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3050 + ($3050 × 4% × 3)
= $3050 + ($3050 ×4/100 × 3)
= $3050 + (3050 × 4 × 3/100)
= $3050 + (12200 × 3/100)
= $3050 + (36600/100)
= $3050 + $366 = $3416
Thus, Amount (A) to be paid = $3416 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3050, the simple interest in 1 year
= 4/100 × 3050
= 4 × 3050/100
= 12200/100 = $122
Thus, simple interest for 1 year = $122
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $122 × 3 = $366
Thus, Simple Interest (SI) = $366
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $366
= $3416
Thus, Amount to be paid = $3416 Answer
Similar Questions
(1) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 7 years.
(2) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 4 years.
(4) In how much time a principal of $3100 will amount to $3565 at a simple interest of 5% per annum?
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.
(6) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(7) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 3 years.
(10) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.