Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 4 years.
Correct Answer
$4774
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 6% × 4
= $3850 ×6/100 × 4
= 3850 × 6 × 4/100
= 23100 × 4/100
= 92400/100
= $924
Thus, Simple Interest = $924
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 = $3850 + $924
= $4774
Thus, Amount to be paid = $4774 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 = $3850
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3850 + ($3850 × 6% × 4)
= $3850 + ($3850 ×6/100 × 4)
= $3850 + (3850 × 6 × 4/100)
= $3850 + (23100 × 4/100)
= $3850 + (92400/100)
= $3850 + $924 = $4774
Thus, Amount (A) to be paid = $4774 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 $3850, the simple interest in 1 year
= 6/100 × 3850
= 6 × 3850/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $231 × 4 = $924
Thus, Simple Interest (SI) = $924
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $924
= $4774
Thus, Amount to be paid = $4774 Answer
Similar Questions
(1) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8797.5 to clear it?
(2) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 4 years.
(6) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 8% simple interest.
(7) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(8) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(9) Barbara had to pay $3976 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Sarah had to pay $4196.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.