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) Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 4 years.
(2) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(3) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?
(4) In how much time a principal of $3100 will amount to $3410 at a simple interest of 2% per annum?
(5) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 4 years.
(7) 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.
(8) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?