Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 4 years.
Correct Answer
$4312
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 3% × 4
= $3850 ×3/100 × 4
= 3850 × 3 × 4/100
= 11550 × 4/100
= 46200/100
= $462
Thus, Simple Interest = $462
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 = $3850 + $462
= $4312
Thus, Amount to be paid = $4312 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 = $3850
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3850 + ($3850 × 3% × 4)
= $3850 + ($3850 ×3/100 × 4)
= $3850 + (3850 × 3 × 4/100)
= $3850 + (11550 × 4/100)
= $3850 + (46200/100)
= $3850 + $462 = $4312
Thus, Amount (A) to be paid = $4312 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 $3850, the simple interest in 1 year
= 3/100 × 3850
= 3 × 3850/100
= 11550/100 = $115.5
Thus, simple interest for 1 year = $115.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $115.5 × 4 = $462
Thus, Simple Interest (SI) = $462
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $462
= $4312
Thus, Amount to be paid = $4312 Answer
Similar Questions
(1) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(2) Anthony had to pay $4816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 8 years.
(4) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?
(5) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(6) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 6% simple interest.
(7) In how much time a principal of $3000 will amount to $3450 at a simple interest of 3% per annum?
(8) Karen had to pay $4187 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) If David paid $4080 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.