Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 3 years.
Correct Answer
$3640
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 4% × 3
= $3250 ×4/100 × 3
= 3250 × 4 × 3/100
= 13000 × 3/100
= 39000/100
= $390
Thus, Simple Interest = $390
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 = $3250 + $390
= $3640
Thus, Amount to be paid = $3640 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 = $3250
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3250 + ($3250 × 4% × 3)
= $3250 + ($3250 ×4/100 × 3)
= $3250 + (3250 × 4 × 3/100)
= $3250 + (13000 × 3/100)
= $3250 + (39000/100)
= $3250 + $390 = $3640
Thus, Amount (A) to be paid = $3640 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 $3250, the simple interest in 1 year
= 4/100 × 3250
= 4 × 3250/100
= 13000/100 = $130
Thus, simple interest for 1 year = $130
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $130 × 3 = $390
Thus, Simple Interest (SI) = $390
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $390
= $3640
Thus, Amount to be paid = $3640 Answer
Similar Questions
(1) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.
(2) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?
(4) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 8 years.
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 4 years.
(7) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(8) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(9) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?
(10) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.