Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 4 years.
Correct Answer
$3660
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 5%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3050 × 5% × 4
= $3050 ×5/100 × 4
= 3050 × 5 × 4/100
= 15250 × 4/100
= 61000/100
= $610
Thus, Simple Interest = $610
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 = $3050 + $610
= $3660
Thus, Amount to be paid = $3660 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 = $3050
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3050 + ($3050 × 5% × 4)
= $3050 + ($3050 ×5/100 × 4)
= $3050 + (3050 × 5 × 4/100)
= $3050 + (15250 × 4/100)
= $3050 + (61000/100)
= $3050 + $610 = $3660
Thus, Amount (A) to be paid = $3660 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3050, the simple interest in 1 year
= 5/100 × 3050
= 5 × 3050/100
= 15250/100 = $152.5
Thus, simple interest for 1 year = $152.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $152.5 × 4 = $610
Thus, Simple Interest (SI) = $610
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $610
= $3660
Thus, Amount to be paid = $3660 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.
(4) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $8892 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 7 years.
(6) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(7) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(8) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9460 to clear the loan, then find the time period of the loan.
(9) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $7040 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.