Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 4 years.
Correct Answer
$4290
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 8% × 4
= $3250 ×8/100 × 4
= 3250 × 8 × 4/100
= 26000 × 4/100
= 104000/100
= $1040
Thus, Simple Interest = $1040
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 = $3250 + $1040
= $4290
Thus, Amount to be paid = $4290 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 = $3250
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 8% × 4)
= $3250 + ($3250 ×8/100 × 4)
= $3250 + (3250 × 8 × 4/100)
= $3250 + (26000 × 4/100)
= $3250 + (104000/100)
= $3250 + $1040 = $4290
Thus, Amount (A) to be paid = $4290 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 $3250, the simple interest in 1 year
= 8/100 × 3250
= 8 × 3250/100
= 26000/100 = $260
Thus, simple interest for 1 year = $260
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $260 × 4 = $1040
Thus, Simple Interest (SI) = $1040
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1040
= $4290
Thus, Amount to be paid = $4290 Answer
Similar Questions
(1) What amount does James have to pay after 6 years if he takes a loan of $3000 at 4% simple interest?
(2) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) What amount will be due after 2 years if David borrowed a sum of $3200 at a 7% simple interest?
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 8 years.
(5) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.
(6) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 8 years.
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 4 years.
(9) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 3 years.
(10) Calculate the amount due if David borrowed a sum of $3400 at 9% simple interest for 3 years.