Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.
Correct Answer
$4686
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 8% × 4
= $3550 ×8/100 × 4
= 3550 × 8 × 4/100
= 28400 × 4/100
= 113600/100
= $1136
Thus, Simple Interest = $1136
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 = $3550 + $1136
= $4686
Thus, Amount to be paid = $4686 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 = $3550
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3550 + ($3550 × 8% × 4)
= $3550 + ($3550 ×8/100 × 4)
= $3550 + (3550 × 8 × 4/100)
= $3550 + (28400 × 4/100)
= $3550 + (113600/100)
= $3550 + $1136 = $4686
Thus, Amount (A) to be paid = $4686 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 $3550, the simple interest in 1 year
= 8/100 × 3550
= 8 × 3550/100
= 28400/100 = $284
Thus, simple interest for 1 year = $284
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $284 × 4 = $1136
Thus, Simple Interest (SI) = $1136
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1136
= $4686
Thus, Amount to be paid = $4686 Answer
Similar Questions
(1) Anthony had to pay $4687 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.
(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(5) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?
(6) How much loan did Edward borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8740 to clear it?
(7) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?
(8) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(9) What amount does David have to pay after 5 years if he takes a loan of $3400 at 10% simple interest?
(10) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5712 to clear the loan, then find the time period of the loan.