Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 3 years.
Correct Answer
$4526
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 8% × 3
= $3650 ×8/100 × 3
= 3650 × 8 × 3/100
= 29200 × 3/100
= 87600/100
= $876
Thus, Simple Interest = $876
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 = $3650 + $876
= $4526
Thus, Amount to be paid = $4526 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 = $3650
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3650 + ($3650 × 8% × 3)
= $3650 + ($3650 ×8/100 × 3)
= $3650 + (3650 × 8 × 3/100)
= $3650 + (29200 × 3/100)
= $3650 + (87600/100)
= $3650 + $876 = $4526
Thus, Amount (A) to be paid = $4526 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 $3650, the simple interest in 1 year
= 8/100 × 3650
= 8 × 3650/100
= 29200/100 = $292
Thus, simple interest for 1 year = $292
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $292 × 3 = $876
Thus, Simple Interest (SI) = $876
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $876
= $4526
Thus, Amount to be paid = $4526 Answer
Similar Questions
(1) If John paid $3456 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) How much loan did Andrew borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7480 to clear it?
(3) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 3 years.
(4) How much loan did Susan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6215 to clear it?
(5) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $10860 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.
(7) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?
(8) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 2% simple interest?
(10) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.