Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
Correct Answer
$4020
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 5% × 4
= $3350 ×5/100 × 4
= 3350 × 5 × 4/100
= 16750 × 4/100
= 67000/100
= $670
Thus, Simple Interest = $670
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 + $670
= $4020
Thus, Amount to be paid = $4020 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) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3350 + ($3350 × 5% × 4)
= $3350 + ($3350 ×5/100 × 4)
= $3350 + (3350 × 5 × 4/100)
= $3350 + (16750 × 4/100)
= $3350 + (67000/100)
= $3350 + $670 = $4020
Thus, Amount (A) to be paid = $4020 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 $3350, the simple interest in 1 year
= 5/100 × 3350
= 5 × 3350/100
= 16750/100 = $167.5
Thus, simple interest for 1 year = $167.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $167.5 × 4 = $670
Thus, Simple Interest (SI) = $670
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $670
= $4020
Thus, Amount to be paid = $4020 Answer
Similar Questions
(1) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 9% simple interest.
(2) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10830 to clear the loan, then find the time period of the loan.
(3) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 8% simple interest for 7 years.
(5) What amount will be due after 2 years if John borrowed a sum of $3100 at a 8% simple interest?
(6) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 8 years.
(8) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9943 to clear the loan, then find the time period of the loan.
(9) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?
(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.