Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 4 years.
Correct Answer
$3782
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 6%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 4
= $3050 ×6/100 × 4
= 3050 × 6 × 4/100
= 18300 × 4/100
= 73200/100
= $732
Thus, Simple Interest = $732
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 + $732
= $3782
Thus, Amount to be paid = $3782 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) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3050 + ($3050 × 6% × 4)
= $3050 + ($3050 ×6/100 × 4)
= $3050 + (3050 × 6 × 4/100)
= $3050 + (18300 × 4/100)
= $3050 + (73200/100)
= $3050 + $732 = $3782
Thus, Amount (A) to be paid = $3782 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3050, the simple interest in 1 year
= 6/100 × 3050
= 6 × 3050/100
= 18300/100 = $183
Thus, simple interest for 1 year = $183
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $183 × 4 = $732
Thus, Simple Interest (SI) = $732
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $732
= $3782
Thus, Amount to be paid = $3782 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(2) How much loan did Ronald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9375 to clear it?
(3) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8791 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 8 years.
(5) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.
(6) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.
(7) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(9) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.