Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 4 years.
Correct Answer
$4026
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 8%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3050 × 8% × 4
= $3050 ×8/100 × 4
= 3050 × 8 × 4/100
= 24400 × 4/100
= 97600/100
= $976
Thus, Simple Interest = $976
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 = $3050 + $976
= $4026
Thus, Amount to be paid = $4026 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 = $3050
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3050 + ($3050 × 8% × 4)
= $3050 + ($3050 ×8/100 × 4)
= $3050 + (3050 × 8 × 4/100)
= $3050 + (24400 × 4/100)
= $3050 + (97600/100)
= $3050 + $976 = $4026
Thus, Amount (A) to be paid = $4026 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3050, the simple interest in 1 year
= 8/100 × 3050
= 8 × 3050/100
= 24400/100 = $244
Thus, simple interest for 1 year = $244
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $244 × 4 = $976
Thus, Simple Interest (SI) = $976
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $976
= $4026
Thus, Amount to be paid = $4026 Answer
Similar Questions
(1) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(2) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 7 years.
(3) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 3% simple interest?
(4) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(5) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 8% simple interest?
(6) If Mark paid $5280 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 8% simple interest?
(8) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(9) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?