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) Robert had to pay $3379 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) If Michael paid $3828 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) How much loan did Nancy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7072.5 to clear it?
(4) If Sandra paid $5340 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 7 years.
(6) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 7% simple interest?
(7) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.
(9) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 10% simple interest for 3 years.