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) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
(2) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(3) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.
(4) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 8% simple interest?
(6) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 7 years.
(7) Emily had to pay $5177.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.