Question:
Calculate the amount due if Patricia borrowed a sum of $3150 at 9% simple interest for 4 years.
Correct Answer
$4284
Solution And Explanation
Solution
Given,
Principal (P) = $3150
Rate of Simple Interest (SI) = 9%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3150 × 9% × 4
= $3150 ×9/100 × 4
= 3150 × 9 × 4/100
= 28350 × 4/100
= 113400/100
= $1134
Thus, Simple Interest = $1134
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 = $3150 + $1134
= $4284
Thus, Amount to be paid = $4284 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 = $3150
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3150 + ($3150 × 9% × 4)
= $3150 + ($3150 ×9/100 × 4)
= $3150 + (3150 × 9 × 4/100)
= $3150 + (28350 × 4/100)
= $3150 + (113400/100)
= $3150 + $1134 = $4284
Thus, Amount (A) to be paid = $4284 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3150, the simple interest in 1 year
= 9/100 × 3150
= 9 × 3150/100
= 28350/100 = $283.5
Thus, simple interest for 1 year = $283.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $283.5 × 4 = $1134
Thus, Simple Interest (SI) = $1134
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $1134
= $4284
Thus, Amount to be paid = $4284 Answer
Similar Questions
(1) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 7% simple interest?
(2) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7003 to clear the loan, then find the time period of the loan.
(3) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?
(4) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 7 years.
(6) If Lisa paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 4% simple interest?
(8) If Jessica borrowed $3750 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 8 years.
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 3 years.