Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
Correct Answer
$3782
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 8%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3050 × 8% × 3
= $3050 ×8/100 × 3
= 3050 × 8 × 3/100
= 24400 × 3/100
= 73200/100
= $732
Thus, Simple Interest = $732
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 = $3050 + $732
= $3782
Thus, Amount to be paid = $3782 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 = $3050
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3050 + ($3050 × 8% × 3)
= $3050 + ($3050 ×8/100 × 3)
= $3050 + (3050 × 8 × 3/100)
= $3050 + (24400 × 3/100)
= $3050 + (73200/100)
= $3050 + $732 = $3782
Thus, Amount (A) to be paid = $3782 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3050, the simple interest in 1 year
= 8/100 × 3050
= 8 × 3050/100
= 24400/100 = $244
Thus, simple interest for 1 year = $244
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $244 × 3 = $732
Thus, Simple Interest (SI) = $732
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $732
= $3782
Thus, Amount to be paid = $3782 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(2) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6258 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?
(4) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7544 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 4 years.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 7% simple interest for 7 years.
(7) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) What amount will be due after 2 years if William borrowed a sum of $3250 at a 9% simple interest?
(9) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(10) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 3 years.