Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
Correct Answer
$4270
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 10%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $3050 × 10% × 4
= $3050 ×10/100 × 4
= 3050 × 10 × 4/100
= 30500 × 4/100
= 122000/100
= $1220
Thus, Simple Interest = $1220
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 = $3050 + $1220
= $4270
Thus, Amount to be paid = $4270 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 = $3050
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3050 + ($3050 × 10% × 4)
= $3050 + ($3050 ×10/100 × 4)
= $3050 + (3050 × 10 × 4/100)
= $3050 + (30500 × 4/100)
= $3050 + (122000/100)
= $3050 + $1220 = $4270
Thus, Amount (A) to be paid = $4270 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3050, the simple interest in 1 year
= 10/100 × 3050
= 10 × 3050/100
= 30500/100 = $305
Thus, simple interest for 1 year = $305
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $305 × 4 = $1220
Thus, Simple Interest (SI) = $1220
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $1220
= $4270
Thus, Amount to be paid = $4270 Answer
Similar Questions
(1) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) What amount will be due after 2 years if John borrowed a sum of $3100 at a 9% simple interest?
(3) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(4) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(5) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 4 years.
(7) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(8) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 3 years.
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 6% simple interest?