Question:
Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 4 years.
Correct Answer
$4096
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 7% × 4
= $3200 ×7/100 × 4
= 3200 × 7 × 4/100
= 22400 × 4/100
= 89600/100
= $896
Thus, Simple Interest = $896
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 = $3200 + $896
= $4096
Thus, Amount to be paid = $4096 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 = $3200
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3200 + ($3200 × 7% × 4)
= $3200 + ($3200 ×7/100 × 4)
= $3200 + (3200 × 7 × 4/100)
= $3200 + (22400 × 4/100)
= $3200 + (89600/100)
= $3200 + $896 = $4096
Thus, Amount (A) to be paid = $4096 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 $3200, the simple interest in 1 year
= 7/100 × 3200
= 7 × 3200/100
= 22400/100 = $224
Thus, simple interest for 1 year = $224
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $224 × 4 = $896
Thus, Simple Interest (SI) = $896
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $896
= $4096
Thus, Amount to be paid = $4096 Answer
Similar Questions
(1) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 6% simple interest?
(2) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $8320 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 7% simple interest.
(4) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) How much loan did Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?
(6) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(7) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
(8) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 2% simple interest?
(9) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 4 years.
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 3 years.