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 after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(2) Donna had to pay $5432 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(4) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(6) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 8% simple interest?
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 7 years.
(9) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 6% simple interest?
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 7 years.