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) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 2% simple interest?
(2) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 7 years.
(3) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 6% simple interest?
(4) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 4 years.
(7) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 4% simple interest.
(8) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?
(9) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10595 to clear the loan, then find the time period of the loan.
(10) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11946 to clear the loan, then find the time period of the loan.