Question:
Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 4 years.
Correct Answer
$3808
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 3% × 4
= $3400 ×3/100 × 4
= 3400 × 3 × 4/100
= 10200 × 4/100
= 40800/100
= $408
Thus, Simple Interest = $408
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 = $3400 + $408
= $3808
Thus, Amount to be paid = $3808 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 = $3400
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3400 + ($3400 × 3% × 4)
= $3400 + ($3400 ×3/100 × 4)
= $3400 + (3400 × 3 × 4/100)
= $3400 + (10200 × 4/100)
= $3400 + (40800/100)
= $3400 + $408 = $3808
Thus, Amount (A) to be paid = $3808 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 $3400, the simple interest in 1 year
= 3/100 × 3400
= 3 × 3400/100
= 10200/100 = $102
Thus, simple interest for 1 year = $102
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $102 × 4 = $408
Thus, Simple Interest (SI) = $408
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $408
= $3808
Thus, Amount to be paid = $3808 Answer
Similar Questions
(1) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) How much loan did Lisa borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6957.5 to clear it?
(3) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 10% simple interest.
(4) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 5% simple interest.
(5) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.
(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 7 years.
(8) If Mary borrowed $3050 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 10% simple interest?
(10) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8580 to clear it?