Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 3 years.
Correct Answer
$4053.5
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 7%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3350 × 7% × 3
= $3350 ×7/100 × 3
= 3350 × 7 × 3/100
= 23450 × 3/100
= 70350/100
= $703.5
Thus, Simple Interest = $703.5
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 = $3350 + $703.5
= $4053.5
Thus, Amount to be paid = $4053.5 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 = $3350
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3350 + ($3350 × 7% × 3)
= $3350 + ($3350 ×7/100 × 3)
= $3350 + (3350 × 7 × 3/100)
= $3350 + (23450 × 3/100)
= $3350 + (70350/100)
= $3350 + $703.5 = $4053.5
Thus, Amount (A) to be paid = $4053.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3350, the simple interest in 1 year
= 7/100 × 3350
= 7 × 3350/100
= 23450/100 = $234.5
Thus, simple interest for 1 year = $234.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $234.5 × 3 = $703.5
Thus, Simple Interest (SI) = $703.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $703.5
= $4053.5
Thus, Amount to be paid = $4053.5 Answer
Similar Questions
(1) If Sandra paid $5340 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?
(3) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
(4) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.
(5) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10920 to clear the loan, then find the time period of the loan.
(6) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $7548 to clear the loan, then find the time period of the loan.
(7) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.
(8) Susan had to pay $3978.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) What amount does David have to pay after 5 years if he takes a loan of $3400 at 3% simple interest?