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) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?
(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 4 years.
(3) If Margaret paid $5046 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) How much loan did Andrew borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7820 to clear it?
(5) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 4% simple interest?
(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 3 years.
(7) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(8) How much loan did Richard borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7000 to clear it?
(9) Joshua had to pay $5194 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.