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) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 5% simple interest?
(2) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(4) Joshua had to pay $5194 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 2% simple interest?
(7) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.
(8) How much loan did Susan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6215 to clear it?
(9) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(10) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 2% simple interest?