Question:
Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
Correct Answer
$4488
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 8% × 4
= $3400 ×8/100 × 4
= 3400 × 8 × 4/100
= 27200 × 4/100
= 108800/100
= $1088
Thus, Simple Interest = $1088
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 = $3400 + $1088
= $4488
Thus, Amount to be paid = $4488 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 = $3400
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3400 + ($3400 × 8% × 4)
= $3400 + ($3400 ×8/100 × 4)
= $3400 + (3400 × 8 × 4/100)
= $3400 + (27200 × 4/100)
= $3400 + (108800/100)
= $3400 + $1088 = $4488
Thus, Amount (A) to be paid = $4488 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 $3400, the simple interest in 1 year
= 8/100 × 3400
= 8 × 3400/100
= 27200/100 = $272
Thus, simple interest for 1 year = $272
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $272 × 4 = $1088
Thus, Simple Interest (SI) = $1088
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $1088
= $4488
Thus, Amount to be paid = $4488 Answer
Similar Questions
(1) If Kenneth paid $5600 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.
(3) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 7 years.
(5) If Matthew paid $4704 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 5% simple interest for 3 years.
(7) What amount will be due after 2 years if James borrowed a sum of $3000 at a 6% simple interest?
(8) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 3% simple interest.
(10) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.