Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 4 years.
Correct Answer
$5016
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 8% × 4
= $3800 ×8/100 × 4
= 3800 × 8 × 4/100
= 30400 × 4/100
= 121600/100
= $1216
Thus, Simple Interest = $1216
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 = $3800 + $1216
= $5016
Thus, Amount to be paid = $5016 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 = $3800
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3800 + ($3800 × 8% × 4)
= $3800 + ($3800 ×8/100 × 4)
= $3800 + (3800 × 8 × 4/100)
= $3800 + (30400 × 4/100)
= $3800 + (121600/100)
= $3800 + $1216 = $5016
Thus, Amount (A) to be paid = $5016 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 $3800, the simple interest in 1 year
= 8/100 × 3800
= 8 × 3800/100
= 30400/100 = $304
Thus, simple interest for 1 year = $304
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $304 × 4 = $1216
Thus, Simple Interest (SI) = $1216
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1216
= $5016
Thus, Amount to be paid = $5016 Answer
Similar Questions
(1) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 8 years.
(2) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 5% simple interest.
(3) In how much time a principal of $3050 will amount to $3660 at a simple interest of 4% per annum?
(4) If Susan paid $4088 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(6) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(7) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 9% simple interest.
(9) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
(10) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $13200 to clear the loan, then find the time period of the loan.