Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 3 years.
Correct Answer
$4774
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 8% × 3
= $3850 ×8/100 × 3
= 3850 × 8 × 3/100
= 30800 × 3/100
= 92400/100
= $924
Thus, Simple Interest = $924
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 = $3850 + $924
= $4774
Thus, Amount to be paid = $4774 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 = $3850
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3850 + ($3850 × 8% × 3)
= $3850 + ($3850 ×8/100 × 3)
= $3850 + (3850 × 8 × 3/100)
= $3850 + (30800 × 3/100)
= $3850 + (92400/100)
= $3850 + $924 = $4774
Thus, Amount (A) to be paid = $4774 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 $3850, the simple interest in 1 year
= 8/100 × 3850
= 8 × 3850/100
= 30800/100 = $308
Thus, simple interest for 1 year = $308
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $308 × 3 = $924
Thus, Simple Interest (SI) = $924
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $924
= $4774
Thus, Amount to be paid = $4774 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 7 years.
(3) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(5) How much loan did Sharon borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9300 to clear it?
(6) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 7 years.
(7) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 3 years.
(9) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 10% simple interest?
(10) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.