Question:
Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 3 years.
Correct Answer
$4216
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 8% × 3
= $3400 ×8/100 × 3
= 3400 × 8 × 3/100
= 27200 × 3/100
= 81600/100
= $816
Thus, Simple Interest = $816
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 = $3400 + $816
= $4216
Thus, Amount to be paid = $4216 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 = $3400
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3400 + ($3400 × 8% × 3)
= $3400 + ($3400 ×8/100 × 3)
= $3400 + (3400 × 8 × 3/100)
= $3400 + (27200 × 3/100)
= $3400 + (81600/100)
= $3400 + $816 = $4216
Thus, Amount (A) to be paid = $4216 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 $3400, the simple interest in 1 year
= 8/100 × 3400
= 8 × 3400/100
= 27200/100 = $272
Thus, simple interest for 1 year = $272
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $272 × 3 = $816
Thus, Simple Interest (SI) = $816
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $816
= $4216
Thus, Amount to be paid = $4216 Answer
Similar Questions
(1) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 3 years.
(2) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 4% simple interest?
(4) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 6% simple interest.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
(6) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 9% simple interest?
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.
(8) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 7 years.
(10) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.