Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 3 years.
Correct Answer
$4312
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 4% × 3
= $3850 ×4/100 × 3
= 3850 × 4 × 3/100
= 15400 × 3/100
= 46200/100
= $462
Thus, Simple Interest = $462
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 = $3850 + $462
= $4312
Thus, Amount to be paid = $4312 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 = $3850
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3850 + ($3850 × 4% × 3)
= $3850 + ($3850 ×4/100 × 3)
= $3850 + (3850 × 4 × 3/100)
= $3850 + (15400 × 3/100)
= $3850 + (46200/100)
= $3850 + $462 = $4312
Thus, Amount (A) to be paid = $4312 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 $3850, the simple interest in 1 year
= 4/100 × 3850
= 4 × 3850/100
= 15400/100 = $154
Thus, simple interest for 1 year = $154
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $154 × 3 = $462
Thus, Simple Interest (SI) = $462
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $462
= $4312
Thus, Amount to be paid = $4312 Answer
Similar Questions
(1) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?
(2) How much loan did Susan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6780 to clear it?
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.
(4) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.
(5) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 6% simple interest.
(6) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8745 to clear it?
(7) Mark had to pay $4664 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Calculate the amount due if Christopher borrowed a sum of $4000 at 5% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
(10) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.