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) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 8 years.
(2) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 3% simple interest?
(3) How much loan did Ryan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8690 to clear it?
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 7% simple interest?
(5) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(7) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.
(8) Linda had to pay $3852.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10679 to clear the loan, then find the time period of the loan.
(10) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.