Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 4 years.
Correct Answer
$3416
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 3%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3050 × 3% × 4
= $3050 ×3/100 × 4
= 3050 × 3 × 4/100
= 9150 × 4/100
= 36600/100
= $366
Thus, Simple Interest = $366
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 = $3050 + $366
= $3416
Thus, Amount to be paid = $3416 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 = $3050
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3050 + ($3050 × 3% × 4)
= $3050 + ($3050 ×3/100 × 4)
= $3050 + (3050 × 3 × 4/100)
= $3050 + (9150 × 4/100)
= $3050 + (36600/100)
= $3050 + $366 = $3416
Thus, Amount (A) to be paid = $3416 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3050, the simple interest in 1 year
= 3/100 × 3050
= 3 × 3050/100
= 9150/100 = $91.5
Thus, simple interest for 1 year = $91.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $91.5 × 4 = $366
Thus, Simple Interest (SI) = $366
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $366
= $3416
Thus, Amount to be paid = $3416 Answer
Similar Questions
(1) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 8% simple interest?
(3) What amount does James have to pay after 5 years if he takes a loan of $3000 at 6% simple interest?
(4) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.
(5) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.
(6) What amount does David have to pay after 6 years if he takes a loan of $3400 at 8% simple interest?
(7) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 4% simple interest?
(8) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.
(9) If Andrew paid $5184 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.