Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 10% simple interest for 3 years.
Correct Answer
$4615
Solution And Explanation
Solution
Given,
Principal (P) = $3550
Rate of Simple Interest (SI) = 10%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 3
= $3550 ×10/100 × 3
= 3550 × 10 × 3/100
= 35500 × 3/100
= 106500/100
= $1065
Thus, Simple Interest = $1065
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 + $1065
= $4615
Thus, Amount to be paid = $4615 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) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3550 + ($3550 × 10% × 3)
= $3550 + ($3550 ×10/100 × 3)
= $3550 + (3550 × 10 × 3/100)
= $3550 + (35500 × 3/100)
= $3550 + (106500/100)
= $3550 + $1065 = $4615
Thus, Amount (A) to be paid = $4615 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3550, the simple interest in 1 year
= 10/100 × 3550
= 10 × 3550/100
= 35500/100 = $355
Thus, simple interest for 1 year = $355
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $355 × 3 = $1065
Thus, Simple Interest (SI) = $1065
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1065
= $4615
Thus, Amount to be paid = $4615 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(2) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 5% simple interest?
(3) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 4 years.
(4) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.
(5) If Karen paid $4266 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 4 years.
(8) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(9) How much loan did Christopher borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6600 to clear it?
(10) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 3% simple interest?