Question:
Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 3 years.
Correct Answer
$5135
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 10% × 3
= $3950 ×10/100 × 3
= 3950 × 10 × 3/100
= 39500 × 3/100
= 118500/100
= $1185
Thus, Simple Interest = $1185
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 = $3950 + $1185
= $5135
Thus, Amount to be paid = $5135 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 = $3950
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3950 + ($3950 × 10% × 3)
= $3950 + ($3950 ×10/100 × 3)
= $3950 + (3950 × 10 × 3/100)
= $3950 + (39500 × 3/100)
= $3950 + (118500/100)
= $3950 + $1185 = $5135
Thus, Amount (A) to be paid = $5135 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 $3950, the simple interest in 1 year
= 10/100 × 3950
= 10 × 3950/100
= 39500/100 = $395
Thus, simple interest for 1 year = $395
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $395 × 3 = $1185
Thus, Simple Interest (SI) = $1185
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $1185
= $5135
Thus, Amount to be paid = $5135 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 6% simple interest.
(2) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 4% simple interest?
(3) What amount does William have to pay after 5 years if he takes a loan of $3500 at 6% simple interest?
(4) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 3% simple interest?
(5) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 9% simple interest?
(6) If Betty paid $4930 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Kimberly had to pay $5347.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 4% simple interest?
(9) Find the amount to be paid if John borrowed a sum of $5200 at 3% simple interest for 8 years.
(10) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.