Question:
Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 4 years.
Correct Answer
$4416
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 7% × 4
= $3450 ×7/100 × 4
= 3450 × 7 × 4/100
= 24150 × 4/100
= 96600/100
= $966
Thus, Simple Interest = $966
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 = $3450 + $966
= $4416
Thus, Amount to be paid = $4416 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 = $3450
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3450 + ($3450 × 7% × 4)
= $3450 + ($3450 ×7/100 × 4)
= $3450 + (3450 × 7 × 4/100)
= $3450 + (24150 × 4/100)
= $3450 + (96600/100)
= $3450 + $966 = $4416
Thus, Amount (A) to be paid = $4416 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 $3450, the simple interest in 1 year
= 7/100 × 3450
= 7 × 3450/100
= 24150/100 = $241.5
Thus, simple interest for 1 year = $241.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $241.5 × 4 = $966
Thus, Simple Interest (SI) = $966
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $966
= $4416
Thus, Amount to be paid = $4416 Answer
Similar Questions
(1) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 4 years.
(2) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.
(5) Mary had to pay $3507.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 3 years.
(7) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 7 years.
(9) If William borrowed $3500 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.