Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 7% simple interest for 4 years.
Correct Answer
$3904
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 7%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 4
= $3050 ×7/100 × 4
= 3050 × 7 × 4/100
= 21350 × 4/100
= 85400/100
= $854
Thus, Simple Interest = $854
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 + $854
= $3904
Thus, Amount to be paid = $3904 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) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3050 + ($3050 × 7% × 4)
= $3050 + ($3050 ×7/100 × 4)
= $3050 + (3050 × 7 × 4/100)
= $3050 + (21350 × 4/100)
= $3050 + (85400/100)
= $3050 + $854 = $3904
Thus, Amount (A) to be paid = $3904 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3050, the simple interest in 1 year
= 7/100 × 3050
= 7 × 3050/100
= 21350/100 = $213.5
Thus, simple interest for 1 year = $213.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $213.5 × 4 = $854
Thus, Simple Interest (SI) = $854
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $854
= $3904
Thus, Amount to be paid = $3904 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(2) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 4 years.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(4) If Christopher borrowed $4000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(6) What amount does James have to pay after 6 years if he takes a loan of $3000 at 6% simple interest?
(7) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?
(8) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(10) In how much time a principal of $3000 will amount to $3240 at a simple interest of 2% per annum?