Question:
Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 4 years.
Correct Answer
$4224
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 8% × 4
= $3200 ×8/100 × 4
= 3200 × 8 × 4/100
= 25600 × 4/100
= 102400/100
= $1024
Thus, Simple Interest = $1024
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 = $3200 + $1024
= $4224
Thus, Amount to be paid = $4224 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 = $3200
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3200 + ($3200 × 8% × 4)
= $3200 + ($3200 ×8/100 × 4)
= $3200 + (3200 × 8 × 4/100)
= $3200 + (25600 × 4/100)
= $3200 + (102400/100)
= $3200 + $1024 = $4224
Thus, Amount (A) to be paid = $4224 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 $3200, the simple interest in 1 year
= 8/100 × 3200
= 8 × 3200/100
= 25600/100 = $256
Thus, simple interest for 1 year = $256
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $256 × 4 = $1024
Thus, Simple Interest (SI) = $1024
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1024
= $4224
Thus, Amount to be paid = $4224 Answer
Similar Questions
(1) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?
(2) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 8 years.
(3) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 7 years.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.
(7) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9437.5 to clear it?
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 3 years.
(9) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 7 years.
(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.