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) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) What amount will be due after 2 years if John borrowed a sum of $3100 at a 10% simple interest?
(3) How much loan did Michael borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5830 to clear it?
(4) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(5) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 7 years.
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 4 years.
(8) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 4 years.
(9) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(10) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 3 years.