Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 3 years.
Correct Answer
$3752
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 4% × 3
= $3350 ×4/100 × 3
= 3350 × 4 × 3/100
= 13400 × 3/100
= 40200/100
= $402
Thus, Simple Interest = $402
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 = $3350 + $402
= $3752
Thus, Amount to be paid = $3752 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 = $3350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3350 + ($3350 × 4% × 3)
= $3350 + ($3350 ×4/100 × 3)
= $3350 + (3350 × 4 × 3/100)
= $3350 + (13400 × 3/100)
= $3350 + (40200/100)
= $3350 + $402 = $3752
Thus, Amount (A) to be paid = $3752 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 $3350, the simple interest in 1 year
= 4/100 × 3350
= 4 × 3350/100
= 13400/100 = $134
Thus, simple interest for 1 year = $134
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $134 × 3 = $402
Thus, Simple Interest (SI) = $402
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $402
= $3752
Thus, Amount to be paid = $3752 Answer
Similar Questions
(1) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?
(2) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 7 years.
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 4 years.
(4) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(5) 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.
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 3 years.
(7) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?
(8) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 6% simple interest.
(10) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.