Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 4 years.
Correct Answer
$4154
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 6% × 4
= $3350 ×6/100 × 4
= 3350 × 6 × 4/100
= 20100 × 4/100
= 80400/100
= $804
Thus, Simple Interest = $804
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 + $804
= $4154
Thus, Amount to be paid = $4154 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) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3350 + ($3350 × 6% × 4)
= $3350 + ($3350 ×6/100 × 4)
= $3350 + (3350 × 6 × 4/100)
= $3350 + (20100 × 4/100)
= $3350 + (80400/100)
= $3350 + $804 = $4154
Thus, Amount (A) to be paid = $4154 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 $3350, the simple interest in 1 year
= 6/100 × 3350
= 6 × 3350/100
= 20100/100 = $201
Thus, simple interest for 1 year = $201
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $201 × 4 = $804
Thus, Simple Interest (SI) = $804
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $804
= $4154
Thus, Amount to be paid = $4154 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(2) In how much time a principal of $3000 will amount to $3360 at a simple interest of 4% per annum?
(3) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(4) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 8 years.
(6) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
(8) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.
(9) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 7 years.
(10) How much loan did Charles borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6490 to clear it?