Question:
Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 4 years.
Correct Answer
$4692
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 9% × 4
= $3450 ×9/100 × 4
= 3450 × 9 × 4/100
= 31050 × 4/100
= 124200/100
= $1242
Thus, Simple Interest = $1242
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 = $3450 + $1242
= $4692
Thus, Amount to be paid = $4692 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 = $3450
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3450 + ($3450 × 9% × 4)
= $3450 + ($3450 ×9/100 × 4)
= $3450 + (3450 × 9 × 4/100)
= $3450 + (31050 × 4/100)
= $3450 + (124200/100)
= $3450 + $1242 = $4692
Thus, Amount (A) to be paid = $4692 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 $3450, the simple interest in 1 year
= 9/100 × 3450
= 9 × 3450/100
= 31050/100 = $310.5
Thus, simple interest for 1 year = $310.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $310.5 × 4 = $1242
Thus, Simple Interest (SI) = $1242
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $1242
= $4692
Thus, Amount to be paid = $4692 Answer
Similar Questions
(1) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 9% simple interest?
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.
(3) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9750 to clear it?
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(5) How much loan did Michael borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6095 to clear it?
(6) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 5% simple interest.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 8 years.
(8) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?
(9) If Linda borrowed $3350 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?