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) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 8% simple interest?
(2) If Donald paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 8 years.
(4) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 6% simple interest?
(5) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(6) How much loan did Charles borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7375 to clear it?
(7) How much loan did George borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8395 to clear it?
(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 8 years.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.
(10) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 3% simple interest?