Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 4 years.
Correct Answer
$4544
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 7% × 4
= $3550 ×7/100 × 4
= 3550 × 7 × 4/100
= 24850 × 4/100
= 99400/100
= $994
Thus, Simple Interest = $994
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 = $3550 + $994
= $4544
Thus, Amount to be paid = $4544 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 = $3550
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3550 + ($3550 × 7% × 4)
= $3550 + ($3550 ×7/100 × 4)
= $3550 + (3550 × 7 × 4/100)
= $3550 + (24850 × 4/100)
= $3550 + (99400/100)
= $3550 + $994 = $4544
Thus, Amount (A) to be paid = $4544 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 $3550, the simple interest in 1 year
= 7/100 × 3550
= 7 × 3550/100
= 24850/100 = $248.5
Thus, simple interest for 1 year = $248.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $248.5 × 4 = $994
Thus, Simple Interest (SI) = $994
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $994
= $4544
Thus, Amount to be paid = $4544 Answer
Similar Questions
(1) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(3) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
(4) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.
(5) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?
(6) Robert had to pay $3379 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6392 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 7 years.
(9) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 9% simple interest.
(10) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.