Question:
Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.
Correct Answer
$3528
Solution And Explanation
Solution
Given,
Principal (P) = $3150
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) = $3150 × 4% × 3
= $3150 ×4/100 × 3
= 3150 × 4 × 3/100
= 12600 × 3/100
= 37800/100
= $378
Thus, Simple Interest = $378
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 = $3150 + $378
= $3528
Thus, Amount to be paid = $3528 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 = $3150
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3150 + ($3150 × 4% × 3)
= $3150 + ($3150 ×4/100 × 3)
= $3150 + (3150 × 4 × 3/100)
= $3150 + (12600 × 3/100)
= $3150 + (37800/100)
= $3150 + $378 = $3528
Thus, Amount (A) to be paid = $3528 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 $3150, the simple interest in 1 year
= 4/100 × 3150
= 4 × 3150/100
= 12600/100 = $126
Thus, simple interest for 1 year = $126
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $126 × 3 = $378
Thus, Simple Interest (SI) = $378
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $378
= $3528
Thus, Amount to be paid = $3528 Answer
Similar Questions
(1) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 8% simple interest?
(2) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(3) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.
(4) What amount does William have to pay after 6 years if he takes a loan of $3500 at 5% simple interest?
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 5% simple interest for 7 years.
(6) What amount does David have to pay after 6 years if he takes a loan of $3400 at 6% simple interest?
(7) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 5% simple interest?
(9) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?
(10) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.