Question:
Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
Correct Answer
$3472
Solution And Explanation
Solution
Given,
Principal (P) = $3100
Rate of Simple Interest (SI) = 4%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3100 × 4% × 3
= $3100 ×4/100 × 3
= 3100 × 4 × 3/100
= 12400 × 3/100
= 37200/100
= $372
Thus, Simple Interest = $372
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 = $3100 + $372
= $3472
Thus, Amount to be paid = $3472 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 = $3100
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3100 + ($3100 × 4% × 3)
= $3100 + ($3100 ×4/100 × 3)
= $3100 + (3100 × 4 × 3/100)
= $3100 + (12400 × 3/100)
= $3100 + (37200/100)
= $3100 + $372 = $3472
Thus, Amount (A) to be paid = $3472 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3100, the simple interest in 1 year
= 4/100 × 3100
= 4 × 3100/100
= 12400/100 = $124
Thus, simple interest for 1 year = $124
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $124 × 3 = $372
Thus, Simple Interest (SI) = $372
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $372
= $3472
Thus, Amount to be paid = $3472 Answer
Similar Questions
(1) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11584 to clear the loan, then find the time period of the loan.
(2) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?
(3) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 4 years.
(5) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 4 years.
(6) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(7) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 8% simple interest?
(8) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 7% simple interest?
(9) In how much time a principal of $3050 will amount to $3660 at a simple interest of 5% per annum?
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 7 years.