Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 4 years.
Correct Answer
$4828
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 9% × 4
= $3550 ×9/100 × 4
= 3550 × 9 × 4/100
= 31950 × 4/100
= 127800/100
= $1278
Thus, Simple Interest = $1278
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 = $3550 + $1278
= $4828
Thus, Amount to be paid = $4828 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 = $3550
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3550 + ($3550 × 9% × 4)
= $3550 + ($3550 ×9/100 × 4)
= $3550 + (3550 × 9 × 4/100)
= $3550 + (31950 × 4/100)
= $3550 + (127800/100)
= $3550 + $1278 = $4828
Thus, Amount (A) to be paid = $4828 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 $3550, the simple interest in 1 year
= 9/100 × 3550
= 9 × 3550/100
= 31950/100 = $319.5
Thus, simple interest for 1 year = $319.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $319.5 × 4 = $1278
Thus, Simple Interest (SI) = $1278
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1278
= $4828
Thus, Amount to be paid = $4828 Answer
Similar Questions
(1) If Mark paid $4752 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) How much loan did Michelle borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8340 to clear it?
(3) John had to pay $3392 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6512 to clear the loan, then find the time period of the loan.
(6) What amount does David have to pay after 5 years if he takes a loan of $3400 at 4% simple interest?
(7) Charles had to pay $4134 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if David borrowed a sum of $3200 at a 7% simple interest?
(10) How much loan did John borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5720 to clear it?