Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 4 years.
Correct Answer
$4818
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 8% × 4
= $3650 ×8/100 × 4
= 3650 × 8 × 4/100
= 29200 × 4/100
= 116800/100
= $1168
Thus, Simple Interest = $1168
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 = $3650 + $1168
= $4818
Thus, Amount to be paid = $4818 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 = $3650
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3650 + ($3650 × 8% × 4)
= $3650 + ($3650 ×8/100 × 4)
= $3650 + (3650 × 8 × 4/100)
= $3650 + (29200 × 4/100)
= $3650 + (116800/100)
= $3650 + $1168 = $4818
Thus, Amount (A) to be paid = $4818 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 $3650, the simple interest in 1 year
= 8/100 × 3650
= 8 × 3650/100
= 29200/100 = $292
Thus, simple interest for 1 year = $292
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $292 × 4 = $1168
Thus, Simple Interest (SI) = $1168
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $1168
= $4818
Thus, Amount to be paid = $4818 Answer
Similar Questions
(1) Linda had to pay $3752 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $14000 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.
(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 4 years.
(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 5% simple interest for 7 years.
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.
(7) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 4% simple interest.
(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7172 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
(10) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.