Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 4 years.
Correct Answer
$3640
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 3% × 4
= $3250 ×3/100 × 4
= 3250 × 3 × 4/100
= 9750 × 4/100
= 39000/100
= $390
Thus, Simple Interest = $390
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 = $3250 + $390
= $3640
Thus, Amount to be paid = $3640 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 = $3250
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 3% × 4)
= $3250 + ($3250 ×3/100 × 4)
= $3250 + (3250 × 3 × 4/100)
= $3250 + (9750 × 4/100)
= $3250 + (39000/100)
= $3250 + $390 = $3640
Thus, Amount (A) to be paid = $3640 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 $3250, the simple interest in 1 year
= 3/100 × 3250
= 3 × 3250/100
= 9750/100 = $97.5
Thus, simple interest for 1 year = $97.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $97.5 × 4 = $390
Thus, Simple Interest (SI) = $390
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $390
= $3640
Thus, Amount to be paid = $3640 Answer
Similar Questions
(1) Christopher had to pay $4480 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(3) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 8% simple interest?
(4) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.
(6) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9720 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 7% simple interest?
(8) Sarah had to pay $4081 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 9% simple interest?
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 7 years.