Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 4 years.
Correct Answer
$4672
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 7% × 4
= $3650 ×7/100 × 4
= 3650 × 7 × 4/100
= 25550 × 4/100
= 102200/100
= $1022
Thus, Simple Interest = $1022
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 = $3650 + $1022
= $4672
Thus, Amount to be paid = $4672 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 = $3650
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3650 + ($3650 × 7% × 4)
= $3650 + ($3650 ×7/100 × 4)
= $3650 + (3650 × 7 × 4/100)
= $3650 + (25550 × 4/100)
= $3650 + (102200/100)
= $3650 + $1022 = $4672
Thus, Amount (A) to be paid = $4672 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 $3650, the simple interest in 1 year
= 7/100 × 3650
= 7 × 3650/100
= 25550/100 = $255.5
Thus, simple interest for 1 year = $255.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $255.5 × 4 = $1022
Thus, Simple Interest (SI) = $1022
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $1022
= $4672
Thus, Amount to be paid = $4672 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(2) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $9050 to clear the loan, then find the time period of the loan.
(3) How much loan did Karen borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6842.5 to clear it?
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 4 years.
(5) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 8 years.
(6) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 7 years.
(7) Mary had to pay $3416 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) If Kimberly paid $5394 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Find the amount to be paid if Richard borrowed a sum of $5600 at 3% simple interest for 8 years.
(10) If Susan paid $4234 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.