Question:
Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 4 years.
Correct Answer
$3864
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 3% × 4
= $3450 ×3/100 × 4
= 3450 × 3 × 4/100
= 10350 × 4/100
= 41400/100
= $414
Thus, Simple Interest = $414
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 = $3450 + $414
= $3864
Thus, Amount to be paid = $3864 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 = $3450
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3450 + ($3450 × 3% × 4)
= $3450 + ($3450 ×3/100 × 4)
= $3450 + (3450 × 3 × 4/100)
= $3450 + (10350 × 4/100)
= $3450 + (41400/100)
= $3450 + $414 = $3864
Thus, Amount (A) to be paid = $3864 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 $3450, the simple interest in 1 year
= 3/100 × 3450
= 3 × 3450/100
= 10350/100 = $103.5
Thus, simple interest for 1 year = $103.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $103.5 × 4 = $414
Thus, Simple Interest (SI) = $414
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $414
= $3864
Thus, Amount to be paid = $3864 Answer
Similar Questions
(1) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 8 years.
(2) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 4 years.
(4) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(7) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 2% simple interest?
(8) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 4% simple interest.
(9) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(10) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 4 years.