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) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Kenneth had to pay $5450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 3% simple interest?
(4) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(6) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $11220 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3150 will amount to $3339 at a simple interest of 2% per annum?
(8) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7208 to clear the loan, then find the time period of the loan.
(9) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(10) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 4% simple interest?