Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.
Correct Answer
$4466
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 4% × 4
= $3850 ×4/100 × 4
= 3850 × 4 × 4/100
= 15400 × 4/100
= 61600/100
= $616
Thus, Simple Interest = $616
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 = $3850 + $616
= $4466
Thus, Amount to be paid = $4466 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 = $3850
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3850 + ($3850 × 4% × 4)
= $3850 + ($3850 ×4/100 × 4)
= $3850 + (3850 × 4 × 4/100)
= $3850 + (15400 × 4/100)
= $3850 + (61600/100)
= $3850 + $616 = $4466
Thus, Amount (A) to be paid = $4466 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 $3850, the simple interest in 1 year
= 4/100 × 3850
= 4 × 3850/100
= 15400/100 = $154
Thus, simple interest for 1 year = $154
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $154 × 4 = $616
Thus, Simple Interest (SI) = $616
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $616
= $4466
Thus, Amount to be paid = $4466 Answer
Similar Questions
(1) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5712 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(3) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(4) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(5) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 2% simple interest?
(6) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(7) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(8) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.
(10) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $10432 to clear the loan, then find the time period of the loan.