Question:
Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 4 years.
Correct Answer
$5390
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 10% × 4
= $3850 ×10/100 × 4
= 3850 × 10 × 4/100
= 38500 × 4/100
= 154000/100
= $1540
Thus, Simple Interest = $1540
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 = $3850 + $1540
= $5390
Thus, Amount to be paid = $5390 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 = $3850
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3850 + ($3850 × 10% × 4)
= $3850 + ($3850 ×10/100 × 4)
= $3850 + (3850 × 10 × 4/100)
= $3850 + (38500 × 4/100)
= $3850 + (154000/100)
= $3850 + $1540 = $5390
Thus, Amount (A) to be paid = $5390 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 $3850, the simple interest in 1 year
= 10/100 × 3850
= 10 × 3850/100
= 38500/100 = $385
Thus, simple interest for 1 year = $385
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $385 × 4 = $1540
Thus, Simple Interest (SI) = $1540
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $1540
= $5390
Thus, Amount to be paid = $5390 Answer
Similar Questions
(1) William had to pay $3920 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 3 years.
(3) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 3 years.
(4) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
(5) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(7) What amount does William have to pay after 6 years if he takes a loan of $3500 at 3% simple interest?
(8) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(9) If Thomas borrowed $3800 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?