Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.
Correct Answer
$4088
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 3% × 4
= $3650 ×3/100 × 4
= 3650 × 3 × 4/100
= 10950 × 4/100
= 43800/100
= $438
Thus, Simple Interest = $438
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 = $3650 + $438
= $4088
Thus, Amount to be paid = $4088 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 = $3650
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3650 + ($3650 × 3% × 4)
= $3650 + ($3650 ×3/100 × 4)
= $3650 + (3650 × 3 × 4/100)
= $3650 + (10950 × 4/100)
= $3650 + (43800/100)
= $3650 + $438 = $4088
Thus, Amount (A) to be paid = $4088 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 $3650, the simple interest in 1 year
= 3/100 × 3650
= 3 × 3650/100
= 10950/100 = $109.5
Thus, simple interest for 1 year = $109.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $109.5 × 4 = $438
Thus, Simple Interest (SI) = $438
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $438
= $4088
Thus, Amount to be paid = $4088 Answer
Similar Questions
(1) If Paul paid $5076 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) In how much time a principal of $3000 will amount to $3600 at a simple interest of 5% per annum?
(3) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 4% simple interest?
(4) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 4 years.
(5) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 8% simple interest?
(6) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 3 years.
(8) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $9086 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 7% simple interest for 3 years.
(10) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.