Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 4 years.
Correct Answer
$3538
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 4%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3050 × 4% × 4
= $3050 ×4/100 × 4
= 3050 × 4 × 4/100
= 12200 × 4/100
= 48800/100
= $488
Thus, Simple Interest = $488
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 = $3050 + $488
= $3538
Thus, Amount to be paid = $3538 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 = $3050
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3050 + ($3050 × 4% × 4)
= $3050 + ($3050 ×4/100 × 4)
= $3050 + (3050 × 4 × 4/100)
= $3050 + (12200 × 4/100)
= $3050 + (48800/100)
= $3050 + $488 = $3538
Thus, Amount (A) to be paid = $3538 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3050, the simple interest in 1 year
= 4/100 × 3050
= 4 × 3050/100
= 12200/100 = $122
Thus, simple interest for 1 year = $122
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $122 × 4 = $488
Thus, Simple Interest (SI) = $488
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $488
= $3538
Thus, Amount to be paid = $3538 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(2) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7546 to clear the loan, then find the time period of the loan.
(3) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(4) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if William borrowed a sum of $3500 at 9% simple interest for 4 years.
(6) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 3 years.
(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(9) Thomas had to pay $4142 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.