Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 4 years.
Correct Answer
$4118
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 4% × 4
= $3550 ×4/100 × 4
= 3550 × 4 × 4/100
= 14200 × 4/100
= 56800/100
= $568
Thus, Simple Interest = $568
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 = $3550 + $568
= $4118
Thus, Amount to be paid = $4118 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 = $3550
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3550 + ($3550 × 4% × 4)
= $3550 + ($3550 ×4/100 × 4)
= $3550 + (3550 × 4 × 4/100)
= $3550 + (14200 × 4/100)
= $3550 + (56800/100)
= $3550 + $568 = $4118
Thus, Amount (A) to be paid = $4118 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 $3550, the simple interest in 1 year
= 4/100 × 3550
= 4 × 3550/100
= 14200/100 = $142
Thus, simple interest for 1 year = $142
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $142 × 4 = $568
Thus, Simple Interest (SI) = $568
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $568
= $4118
Thus, Amount to be paid = $4118 Answer
Similar Questions
(1) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3050 will amount to $3294 at a simple interest of 4% per annum?
(3) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.
(4) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.
(5) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(6) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(7) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 6% simple interest?
(8) If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.
(10) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7310 to clear the loan, then find the time period of the loan.