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) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?
(2) Donna had to pay $5432 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(4) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Steven had to pay $4876 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 5% simple interest.
(7) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(8) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 6% simple interest?
(9) Matthew had to pay $4704 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) If Richard paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.