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) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
(2) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.
(3) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $6936 to clear the loan, then find the time period of the loan.
(4) Susan had to pay $4088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) What amount will be due after 2 years if James borrowed a sum of $3000 at a 5% simple interest?
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 7 years.
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(8) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(9) How much loan did Richard borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6160 to clear it?
(10) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.