Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 3 years.
Correct Answer
$4543
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 6% × 3
= $3850 ×6/100 × 3
= 3850 × 6 × 3/100
= 23100 × 3/100
= 69300/100
= $693
Thus, Simple Interest = $693
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 + $693
= $4543
Thus, Amount to be paid = $4543 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) = 6%
And, Time (t) = 3 years
Thus, Amount (A)
= $3850 + ($3850 × 6% × 3)
= $3850 + ($3850 ×6/100 × 3)
= $3850 + (3850 × 6 × 3/100)
= $3850 + (23100 × 3/100)
= $3850 + (69300/100)
= $3850 + $693 = $4543
Thus, Amount (A) to be paid = $4543 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 $3850, the simple interest in 1 year
= 6/100 × 3850
= 6 × 3850/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $231 × 3 = $693
Thus, Simple Interest (SI) = $693
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $693
= $4543
Thus, Amount to be paid = $4543 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.
(2) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(3) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?
(4) How much loan did James borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5500 to clear it?
(5) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 8% simple interest?
(6) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 9% simple interest?
(7) If Susan borrowed $3650 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 7 years.
(9) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 9% simple interest?
(10) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 7 years.