Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 4 years.
Correct Answer
$4690
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 10% × 4
= $3350 ×10/100 × 4
= 3350 × 10 × 4/100
= 33500 × 4/100
= 134000/100
= $1340
Thus, Simple Interest = $1340
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 = $3350 + $1340
= $4690
Thus, Amount to be paid = $4690 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 = $3350
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3350 + ($3350 × 10% × 4)
= $3350 + ($3350 ×10/100 × 4)
= $3350 + (3350 × 10 × 4/100)
= $3350 + (33500 × 4/100)
= $3350 + (134000/100)
= $3350 + $1340 = $4690
Thus, Amount (A) to be paid = $4690 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 $3350, the simple interest in 1 year
= 10/100 × 3350
= 10 × 3350/100
= 33500/100 = $335
Thus, simple interest for 1 year = $335
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $335 × 4 = $1340
Thus, Simple Interest (SI) = $1340
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1340
= $4690
Thus, Amount to be paid = $4690 Answer
Similar Questions
(1) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
(3) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.
(5) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.
(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 4% simple interest?
(7) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(8) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7546 to clear the loan, then find the time period of the loan.
(9) James had to pay $3270 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.