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) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9360 to clear it?
(2) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 3 years.
(4) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8682.5 to clear it?
(5) Jennifer had to pay $3445 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) What amount does James have to pay after 6 years if he takes a loan of $3000 at 9% simple interest?
(7) In how much time a principal of $3200 will amount to $3392 at a simple interest of 2% per annum?
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.
(9) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(10) Paul had to pay $5405 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.