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 10 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(2) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.
(3) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 8 years.
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 4 years.
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.
(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 5% simple interest for 7 years.
(8) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(9) If Betty paid $5100 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.