Question:
Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 3 years.
Correct Answer
$3864
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 4% × 3
= $3450 ×4/100 × 3
= 3450 × 4 × 3/100
= 13800 × 3/100
= 41400/100
= $414
Thus, Simple Interest = $414
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 = $3450 + $414
= $3864
Thus, Amount to be paid = $3864 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 = $3450
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3450 + ($3450 × 4% × 3)
= $3450 + ($3450 ×4/100 × 3)
= $3450 + (3450 × 4 × 3/100)
= $3450 + (13800 × 3/100)
= $3450 + (41400/100)
= $3450 + $414 = $3864
Thus, Amount (A) to be paid = $3864 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 $3450, the simple interest in 1 year
= 4/100 × 3450
= 4 × 3450/100
= 13800/100 = $138
Thus, simple interest for 1 year = $138
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $138 × 3 = $414
Thus, Simple Interest (SI) = $414
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $414
= $3864
Thus, Amount to be paid = $3864 Answer
Similar Questions
(1) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 7 years.
(2) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(4) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.
(5) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 7 years.
(7) How much loan did Robert borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6120 to clear it?
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 3 years.
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 3 years.