Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.
Correct Answer
$4288
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 7% × 4
= $3350 ×7/100 × 4
= 3350 × 7 × 4/100
= 23450 × 4/100
= 93800/100
= $938
Thus, Simple Interest = $938
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 = $3350 + $938
= $4288
Thus, Amount to be paid = $4288 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 = $3350
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3350 + ($3350 × 7% × 4)
= $3350 + ($3350 ×7/100 × 4)
= $3350 + (3350 × 7 × 4/100)
= $3350 + (23450 × 4/100)
= $3350 + (93800/100)
= $3350 + $938 = $4288
Thus, Amount (A) to be paid = $4288 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 $3350, the simple interest in 1 year
= 7/100 × 3350
= 7 × 3350/100
= 23450/100 = $234.5
Thus, simple interest for 1 year = $234.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $234.5 × 4 = $938
Thus, Simple Interest (SI) = $938
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $938
= $4288
Thus, Amount to be paid = $4288 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.
(2) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 7% simple interest?
(3) How much loan did Matthew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7440 to clear it?
(4) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 4 years.
(5) How much loan did Linda borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6420 to clear it?
(6) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 8 years.
(8) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 5% simple interest.
(9) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 8% simple interest?
(10) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9387 to clear the loan, then find the time period of the loan.