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) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.
(3) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(4) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 4% simple interest.
(5) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
(6) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 3 years.
(8) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 9% simple interest.
(9) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(10) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 10% simple interest?