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) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.
(4) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?
(6) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if James borrowed a sum of $3000 at a 7% simple interest?
(8) In how much time a principal of $3100 will amount to $3410 at a simple interest of 2% per annum?
(9) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.
(10) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.