Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 3 years.
Correct Answer
$4295.5
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 7% × 3
= $3550 ×7/100 × 3
= 3550 × 7 × 3/100
= 24850 × 3/100
= 74550/100
= $745.5
Thus, Simple Interest = $745.5
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 = $3550 + $745.5
= $4295.5
Thus, Amount to be paid = $4295.5 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 = $3550
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3550 + ($3550 × 7% × 3)
= $3550 + ($3550 ×7/100 × 3)
= $3550 + (3550 × 7 × 3/100)
= $3550 + (24850 × 3/100)
= $3550 + (74550/100)
= $3550 + $745.5 = $4295.5
Thus, Amount (A) to be paid = $4295.5 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 $3550, the simple interest in 1 year
= 7/100 × 3550
= 7 × 3550/100
= 24850/100 = $248.5
Thus, simple interest for 1 year = $248.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $248.5 × 3 = $745.5
Thus, Simple Interest (SI) = $745.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $745.5
= $4295.5
Thus, Amount to be paid = $4295.5 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 5% simple interest.
(2) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?
(4) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(5) If Elizabeth paid $3726 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 7 years.
(7) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) What amount does William have to pay after 5 years if he takes a loan of $3500 at 9% simple interest?
(9) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 8 years.
(10) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.