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) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8364 to clear the loan, then find the time period of the loan.
(2) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 7% simple interest?
(3) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 8 years.
(5) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(7) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 8% simple interest?
(8) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(9) If Jennifer paid $3510 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8195 to clear the loan, then find the time period of the loan.