Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 3 years.
Correct Answer
$4154
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 8% × 3
= $3350 ×8/100 × 3
= 3350 × 8 × 3/100
= 26800 × 3/100
= 80400/100
= $804
Thus, Simple Interest = $804
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 = $3350 + $804
= $4154
Thus, Amount to be paid = $4154 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 = $3350
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3350 + ($3350 × 8% × 3)
= $3350 + ($3350 ×8/100 × 3)
= $3350 + (3350 × 8 × 3/100)
= $3350 + (26800 × 3/100)
= $3350 + (80400/100)
= $3350 + $804 = $4154
Thus, Amount (A) to be paid = $4154 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 $3350, the simple interest in 1 year
= 8/100 × 3350
= 8 × 3350/100
= 26800/100 = $268
Thus, simple interest for 1 year = $268
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $268 × 3 = $804
Thus, Simple Interest (SI) = $804
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $804
= $4154
Thus, Amount to be paid = $4154 Answer
Similar Questions
(1) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 4% simple interest?
(2) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 7% simple interest for 7 years.
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 4 years.
(5) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 7 years.
(9) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(10) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.