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) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 7 years.
(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(3) If Emily paid $5700 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 6% simple interest.
(5) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?
(6) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 3 years.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 8 years.
(9) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(10) If Thomas paid $4104 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.