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) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 3 years.
(2) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.
(3) How much loan did Amanda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8222.5 to clear it?
(4) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.
(5) If Barbara borrowed $3550 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 4 years.
(7) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(8) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 9% simple interest?
(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 8 years.
(10) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.