Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.
Correct Answer
$4402
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 6% × 4
= $3550 ×6/100 × 4
= 3550 × 6 × 4/100
= 21300 × 4/100
= 85200/100
= $852
Thus, Simple Interest = $852
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 = $3550 + $852
= $4402
Thus, Amount to be paid = $4402 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 = $3550
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3550 + ($3550 × 6% × 4)
= $3550 + ($3550 ×6/100 × 4)
= $3550 + (3550 × 6 × 4/100)
= $3550 + (21300 × 4/100)
= $3550 + (85200/100)
= $3550 + $852 = $4402
Thus, Amount (A) to be paid = $4402 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 $3550, the simple interest in 1 year
= 6/100 × 3550
= 6 × 3550/100
= 21300/100 = $213
Thus, simple interest for 1 year = $213
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $213 × 4 = $852
Thus, Simple Interest (SI) = $852
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $852
= $4402
Thus, Amount to be paid = $4402 Answer
Similar Questions
(1) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.
(2) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) In how much time a principal of $3100 will amount to $3286 at a simple interest of 2% per annum?
(4) If Susan paid $3942 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) If Andrew paid $5184 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8568 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(8) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8580 to clear it?
(9) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?
(10) How much loan did Donald borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7475 to clear it?