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) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 8 years.
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 3 years.
(4) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?
(5) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?
(6) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 8 years.
(8) If Robert paid $3348 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) What amount does David have to pay after 6 years if he takes a loan of $3400 at 5% simple interest?
(10) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?