Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
Correct Answer
$4402
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 8% × 3
= $3550 ×8/100 × 3
= 3550 × 8 × 3/100
= 28400 × 3/100
= 85200/100
= $852
Thus, Simple Interest = $852
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 = $3550 + $852
= $4402
Thus, Amount to be paid = $4402 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 = $3550
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3550 + ($3550 × 8% × 3)
= $3550 + ($3550 ×8/100 × 3)
= $3550 + (3550 × 8 × 3/100)
= $3550 + (28400 × 3/100)
= $3550 + (85200/100)
= $3550 + $852 = $4402
Thus, Amount (A) to be paid = $4402 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 $3550, the simple interest in 1 year
= 8/100 × 3550
= 8 × 3550/100
= 28400/100 = $284
Thus, simple interest for 1 year = $284
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $284 × 3 = $852
Thus, Simple Interest (SI) = $852
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $852
= $4402
Thus, Amount to be paid = $4402 Answer
Similar Questions
(1) In how much time a principal of $3000 will amount to $3300 at a simple interest of 5% per annum?
(2) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $8428 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 4 years.
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.
(5) How much loan did Ronald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9375 to clear it?
(6) If David paid $3808 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(8) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(9) If Michael paid $3564 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 3 years.