Question:
Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 4 years.
Correct Answer
$5372
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 9% × 4
= $3950 ×9/100 × 4
= 3950 × 9 × 4/100
= 35550 × 4/100
= 142200/100
= $1422
Thus, Simple Interest = $1422
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 = $3950 + $1422
= $5372
Thus, Amount to be paid = $5372 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 = $3950
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3950 + ($3950 × 9% × 4)
= $3950 + ($3950 ×9/100 × 4)
= $3950 + (3950 × 9 × 4/100)
= $3950 + (35550 × 4/100)
= $3950 + (142200/100)
= $3950 + $1422 = $5372
Thus, Amount (A) to be paid = $5372 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 $3950, the simple interest in 1 year
= 9/100 × 3950
= 9 × 3950/100
= 35550/100 = $355.5
Thus, simple interest for 1 year = $355.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $355.5 × 4 = $1422
Thus, Simple Interest (SI) = $1422
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $1422
= $5372
Thus, Amount to be paid = $5372 Answer
Similar Questions
(1) Find the amount to be paid if Jessica borrowed a sum of $5750 at 8% simple interest for 7 years.
(2) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 9% simple interest.
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 3% simple interest?
(5) Find the amount to be paid if Christopher borrowed a sum of $6000 at 10% simple interest for 8 years.
(6) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $12489 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 4 years.
(8) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(10) If Margaret paid $5046 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.