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) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.
(2) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.
(3) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(4) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 4% simple interest?
(5) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(6) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 2% simple interest?
(7) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 9% simple interest?
(8) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 7% simple interest?
(9) Kimberly had to pay $5347.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Karen had to pay $4542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.