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) What amount does William have to pay after 5 years if he takes a loan of $3500 at 10% simple interest?
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 3 years.
(3) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.
(4) How much loan did Carol borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8460 to clear it?
(5) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?
(6) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 8 years.
(8) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $5984 to clear the loan, then find the time period of the loan.