Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 3 years.
Correct Answer
$3976
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 4% × 3
= $3550 ×4/100 × 3
= 3550 × 4 × 3/100
= 14200 × 3/100
= 42600/100
= $426
Thus, Simple Interest = $426
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 = $3550 + $426
= $3976
Thus, Amount to be paid = $3976 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 = $3550
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3550 + ($3550 × 4% × 3)
= $3550 + ($3550 ×4/100 × 3)
= $3550 + (3550 × 4 × 3/100)
= $3550 + (14200 × 3/100)
= $3550 + (42600/100)
= $3550 + $426 = $3976
Thus, Amount (A) to be paid = $3976 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 $3550, the simple interest in 1 year
= 4/100 × 3550
= 4 × 3550/100
= 14200/100 = $142
Thus, simple interest for 1 year = $142
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $142 × 3 = $426
Thus, Simple Interest (SI) = $426
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $426
= $3976
Thus, Amount to be paid = $3976 Answer
Similar Questions
(1) How much loan did Barbara borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6382.5 to clear it?
(2) What amount does David have to pay after 5 years if he takes a loan of $3400 at 4% simple interest?
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 3 years.
(4) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(5) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 4 years.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 4 years.
(8) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 10% simple interest?
(9) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?
(10) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 5% simple interest.