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) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.
(2) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 8 years.
(4) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 4 years.
(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(6) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 7 years.
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 8 years.
(9) What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?
(10) Donald had to pay $4905 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.