Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.
Correct Answer
$4422
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 8% × 4
= $3350 ×8/100 × 4
= 3350 × 8 × 4/100
= 26800 × 4/100
= 107200/100
= $1072
Thus, Simple Interest = $1072
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 = $3350 + $1072
= $4422
Thus, Amount to be paid = $4422 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 = $3350
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3350 + ($3350 × 8% × 4)
= $3350 + ($3350 ×8/100 × 4)
= $3350 + (3350 × 8 × 4/100)
= $3350 + (26800 × 4/100)
= $3350 + (107200/100)
= $3350 + $1072 = $4422
Thus, Amount (A) to be paid = $4422 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 $3350, the simple interest in 1 year
= 8/100 × 3350
= 8 × 3350/100
= 26800/100 = $268
Thus, simple interest for 1 year = $268
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $268 × 4 = $1072
Thus, Simple Interest (SI) = $1072
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1072
= $4422
Thus, Amount to be paid = $4422 Answer
Similar Questions
(1) James had to pay $3270 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 Donald borrowed a sum of $3750 at a 7% simple interest?
(3) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(4) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 3 years.
(6) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 3 years.
(9) Lisa had to pay $4293 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.