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) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?
(2) What amount does James have to pay after 6 years if he takes a loan of $3000 at 9% simple interest?
(3) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8940 to clear the loan, then find the time period of the loan.
(4) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(5) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?
(6) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 6% simple interest?
(7) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 2% simple interest?
(9) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 4 years.