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) Anthony had to pay $4558 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 8 years.
(3) Christopher had to pay $4480 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?
(5) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 10% simple interest?
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 4 years.
(7) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 7 years.
(8) If Jessica borrowed $3750 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Susan borrowed a sum of $3650 at 9% simple interest for 3 years.