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) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?
(2) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 3 years.
(3) If Betty paid $4930 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5712 to clear the loan, then find the time period of the loan.
(5) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(7) How much loan did Sarah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7020 to clear it?
(8) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(9) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 5% simple interest?
(10) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.