Question:
Calculate the amount due if Barbara borrowed a sum of $3550 at 10% simple interest for 4 years.
Correct Answer
$4970
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 10% × 4
= $3550 ×10/100 × 4
= 3550 × 10 × 4/100
= 35500 × 4/100
= 142000/100
= $1420
Thus, Simple Interest = $1420
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 = $3550 + $1420
= $4970
Thus, Amount to be paid = $4970 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 = $3550
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3550 + ($3550 × 10% × 4)
= $3550 + ($3550 ×10/100 × 4)
= $3550 + (3550 × 10 × 4/100)
= $3550 + (35500 × 4/100)
= $3550 + (142000/100)
= $3550 + $1420 = $4970
Thus, Amount (A) to be paid = $4970 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 $3550, the simple interest in 1 year
= 10/100 × 3550
= 10 × 3550/100
= 35500/100 = $355
Thus, simple interest for 1 year = $355
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $355 × 4 = $1420
Thus, Simple Interest (SI) = $1420
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1420
= $4970
Thus, Amount to be paid = $4970 Answer
Similar Questions
(1) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 8 years.
(2) What amount will be due after 2 years if James borrowed a sum of $3000 at a 9% simple interest?
(3) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 8 years.
(4) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.
(5) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?
(7) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?
(8) In how much time a principal of $3200 will amount to $3392 at a simple interest of 3% per annum?
(9) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?
(10) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.