Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 4 years.
Correct Answer
$3886
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 4% × 4
= $3350 ×4/100 × 4
= 3350 × 4 × 4/100
= 13400 × 4/100
= 53600/100
= $536
Thus, Simple Interest = $536
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 = $3350 + $536
= $3886
Thus, Amount to be paid = $3886 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 = $3350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3350 + ($3350 × 4% × 4)
= $3350 + ($3350 ×4/100 × 4)
= $3350 + (3350 × 4 × 4/100)
= $3350 + (13400 × 4/100)
= $3350 + (53600/100)
= $3350 + $536 = $3886
Thus, Amount (A) to be paid = $3886 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 $3350, the simple interest in 1 year
= 4/100 × 3350
= 4 × 3350/100
= 13400/100 = $134
Thus, simple interest for 1 year = $134
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $134 × 4 = $536
Thus, Simple Interest (SI) = $536
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $536
= $3886
Thus, Amount to be paid = $3886 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(2) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(3) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(4) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 6% simple interest?
(5) If Steven paid $4968 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 8 years.
(7) How much loan did Sarah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7020 to clear it?
(8) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 8 years.
(9) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.