Question:
Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 3 years.
Correct Answer
$4779.5
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 7% × 3
= $3950 ×7/100 × 3
= 3950 × 7 × 3/100
= 27650 × 3/100
= 82950/100
= $829.5
Thus, Simple Interest = $829.5
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 = $3950 + $829.5
= $4779.5
Thus, Amount to be paid = $4779.5 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 = $3950
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3950 + ($3950 × 7% × 3)
= $3950 + ($3950 ×7/100 × 3)
= $3950 + (3950 × 7 × 3/100)
= $3950 + (27650 × 3/100)
= $3950 + (82950/100)
= $3950 + $829.5 = $4779.5
Thus, Amount (A) to be paid = $4779.5 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 $3950, the simple interest in 1 year
= 7/100 × 3950
= 7 × 3950/100
= 27650/100 = $276.5
Thus, simple interest for 1 year = $276.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $276.5 × 3 = $829.5
Thus, Simple Interest (SI) = $829.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $829.5
= $4779.5
Thus, Amount to be paid = $4779.5 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.
(2) What amount will be due after 2 years if John borrowed a sum of $3100 at a 9% simple interest?
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 4 years.
(4) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(6) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?
(7) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9020 to clear the loan, then find the time period of the loan.
(8) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 4 years.
(10) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.