Question:
Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 4 years.
Correct Answer
$5214
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 8% × 4
= $3950 ×8/100 × 4
= 3950 × 8 × 4/100
= 31600 × 4/100
= 126400/100
= $1264
Thus, Simple Interest = $1264
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 = $3950 + $1264
= $5214
Thus, Amount to be paid = $5214 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 = $3950
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3950 + ($3950 × 8% × 4)
= $3950 + ($3950 ×8/100 × 4)
= $3950 + (3950 × 8 × 4/100)
= $3950 + (31600 × 4/100)
= $3950 + (126400/100)
= $3950 + $1264 = $5214
Thus, Amount (A) to be paid = $5214 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 $3950, the simple interest in 1 year
= 8/100 × 3950
= 8 × 3950/100
= 31600/100 = $316
Thus, simple interest for 1 year = $316
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $316 × 4 = $1264
Thus, Simple Interest (SI) = $1264
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $1264
= $5214
Thus, Amount to be paid = $5214 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 5% simple interest.
(2) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 8 years.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.
(5) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(6) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(7) If Joshua paid $5880 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 4 years.
(9) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.
(10) John had to pay $3680 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.