Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 4 years.
Correct Answer
$3976
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 3% × 4
= $3550 ×3/100 × 4
= 3550 × 3 × 4/100
= 10650 × 4/100
= 42600/100
= $426
Thus, Simple Interest = $426
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 = $3550 + $426
= $3976
Thus, Amount to be paid = $3976 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 = $3550
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3550 + ($3550 × 3% × 4)
= $3550 + ($3550 ×3/100 × 4)
= $3550 + (3550 × 3 × 4/100)
= $3550 + (10650 × 4/100)
= $3550 + (42600/100)
= $3550 + $426 = $3976
Thus, Amount (A) to be paid = $3976 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 $3550, the simple interest in 1 year
= 3/100 × 3550
= 3 × 3550/100
= 10650/100 = $106.5
Thus, simple interest for 1 year = $106.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $106.5 × 4 = $426
Thus, Simple Interest (SI) = $426
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $426
= $3976
Thus, Amount to be paid = $3976 Answer
Similar Questions
(1) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 8% simple interest?
(2) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.
(3) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?
(4) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 2% simple interest for 3 years.
(6) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.
(8) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 3 years.
(10) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 4 years.