Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 3 years.
Correct Answer
$4189
Solution And Explanation
Solution
Given,
Principal (P) = $3550
Rate of Simple Interest (SI) = 6%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 3
= $3550 ×6/100 × 3
= 3550 × 6 × 3/100
= 21300 × 3/100
= 63900/100
= $639
Thus, Simple Interest = $639
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 + $639
= $4189
Thus, Amount to be paid = $4189 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) = 6%
And, Time (t) = 3 years
Thus, Amount (A)
= $3550 + ($3550 × 6% × 3)
= $3550 + ($3550 ×6/100 × 3)
= $3550 + (3550 × 6 × 3/100)
= $3550 + (21300 × 3/100)
= $3550 + (63900/100)
= $3550 + $639 = $4189
Thus, Amount (A) to be paid = $4189 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3550, the simple interest in 1 year
= 6/100 × 3550
= 6 × 3550/100
= 21300/100 = $213
Thus, simple interest for 1 year = $213
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $213 × 3 = $639
Thus, Simple Interest (SI) = $639
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $639
= $4189
Thus, Amount to be paid = $4189 Answer
Similar Questions
(1) Anthony had to pay $4558 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.
(3) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 4% simple interest.
(4) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 7 years.
(6) How much loan did Susan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6497.5 to clear it?
(7) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $9617 to clear the loan, then find the time period of the loan.
(8) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12800 to clear the loan, then find the time period of the loan.
(9) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(10) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?