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) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.
(2) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(4) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $14000 to clear the loan, then find the time period of the loan.
(5) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) How much loan did Charles borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7080 to clear it?
(7) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8745 to clear it?
(8) What amount does John have to pay after 6 years if he takes a loan of $3200 at 7% simple interest?
(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 3 years.
(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.