Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 4 years.
Correct Answer
$3770
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 4% × 4
= $3250 ×4/100 × 4
= 3250 × 4 × 4/100
= 13000 × 4/100
= 52000/100
= $520
Thus, Simple Interest = $520
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 = $3250 + $520
= $3770
Thus, Amount to be paid = $3770 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 = $3250
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 4% × 4)
= $3250 + ($3250 ×4/100 × 4)
= $3250 + (3250 × 4 × 4/100)
= $3250 + (13000 × 4/100)
= $3250 + (52000/100)
= $3250 + $520 = $3770
Thus, Amount (A) to be paid = $3770 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 $3250, the simple interest in 1 year
= 4/100 × 3250
= 4 × 3250/100
= 13000/100 = $130
Thus, simple interest for 1 year = $130
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $130 × 4 = $520
Thus, Simple Interest (SI) = $520
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $520
= $3770
Thus, Amount to be paid = $3770 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 4 years.
(3) How much loan did Jason borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8855 to clear it?
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 3 years.
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.
(6) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(7) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 4 years.
(9) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 3 years.
(10) In how much time a principal of $3200 will amount to $3680 at a simple interest of 5% per annum?