Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 4 years.
Correct Answer
$5236
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 9% × 4
= $3850 ×9/100 × 4
= 3850 × 9 × 4/100
= 34650 × 4/100
= 138600/100
= $1386
Thus, Simple Interest = $1386
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 = $3850 + $1386
= $5236
Thus, Amount to be paid = $5236 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 = $3850
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3850 + ($3850 × 9% × 4)
= $3850 + ($3850 ×9/100 × 4)
= $3850 + (3850 × 9 × 4/100)
= $3850 + (34650 × 4/100)
= $3850 + (138600/100)
= $3850 + $1386 = $5236
Thus, Amount (A) to be paid = $5236 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 $3850, the simple interest in 1 year
= 9/100 × 3850
= 9 × 3850/100
= 34650/100 = $346.5
Thus, simple interest for 1 year = $346.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $346.5 × 4 = $1386
Thus, Simple Interest (SI) = $1386
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $1386
= $5236
Thus, Amount to be paid = $5236 Answer
Similar Questions
(1) In how much time a principal of $3050 will amount to $3233 at a simple interest of 3% per annum?
(2) In how much time a principal of $3050 will amount to $3660 at a simple interest of 4% per annum?
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 4% simple interest?
(4) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 3% simple interest.
(5) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 7 years.
(8) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 10% simple interest?
(9) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 7 years.