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) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 3% simple interest?
(2) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(4) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(5) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7548 to clear the loan, then find the time period of the loan.
(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 6% simple interest?
(7) Karen had to pay $4424 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 5% simple interest?
(9) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(10) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.