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 William paid $3920 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(3) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(4) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 7 years.
(6) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(7) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(8) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(9) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(10) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8736 to clear the loan, then find the time period of the loan.