Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 3 years.
Correct Answer
$4030
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 8% × 3
= $3250 ×8/100 × 3
= 3250 × 8 × 3/100
= 26000 × 3/100
= 78000/100
= $780
Thus, Simple Interest = $780
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 = $3250 + $780
= $4030
Thus, Amount to be paid = $4030 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 = $3250
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3250 + ($3250 × 8% × 3)
= $3250 + ($3250 ×8/100 × 3)
= $3250 + (3250 × 8 × 3/100)
= $3250 + (26000 × 3/100)
= $3250 + (78000/100)
= $3250 + $780 = $4030
Thus, Amount (A) to be paid = $4030 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 $3250, the simple interest in 1 year
= 8/100 × 3250
= 8 × 3250/100
= 26000/100 = $260
Thus, simple interest for 1 year = $260
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $260 × 3 = $780
Thus, Simple Interest (SI) = $780
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $780
= $4030
Thus, Amount to be paid = $4030 Answer
Similar Questions
(1) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 3 years.
(2) How much loan did Daniel borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6710 to clear it?
(3) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?
(4) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7602 to clear the loan, then find the time period of the loan.
(5) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 10% simple interest.
(7) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.
(8) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.
(9) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(10) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?