Question:
Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 4 years.
Correct Answer
$4352
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 7% × 4
= $3400 ×7/100 × 4
= 3400 × 7 × 4/100
= 23800 × 4/100
= 95200/100
= $952
Thus, Simple Interest = $952
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 = $3400 + $952
= $4352
Thus, Amount to be paid = $4352 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 = $3400
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3400 + ($3400 × 7% × 4)
= $3400 + ($3400 ×7/100 × 4)
= $3400 + (3400 × 7 × 4/100)
= $3400 + (23800 × 4/100)
= $3400 + (95200/100)
= $3400 + $952 = $4352
Thus, Amount (A) to be paid = $4352 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 $3400, the simple interest in 1 year
= 7/100 × 3400
= 7 × 3400/100
= 23800/100 = $238
Thus, simple interest for 1 year = $238
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $238 × 4 = $952
Thus, Simple Interest (SI) = $952
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $952
= $4352
Thus, Amount to be paid = $4352 Answer
Similar Questions
(1) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 3 years.
(2) In how much time a principal of $3200 will amount to $3456 at a simple interest of 4% per annum?
(3) How much loan did Kevin borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8520 to clear it?
(4) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 8 years.
(5) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?
(7) How much loan did Joshua borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7590 to clear it?
(8) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.
(10) Jennifer had to pay $3445 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.