Question:
Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
Correct Answer
$3920
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 4% × 3
= $3500 ×4/100 × 3
= 3500 × 4 × 3/100
= 14000 × 3/100
= 42000/100
= $420
Thus, Simple Interest = $420
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 = $3500 + $420
= $3920
Thus, Amount to be paid = $3920 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 = $3500
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3500 + ($3500 × 4% × 3)
= $3500 + ($3500 ×4/100 × 3)
= $3500 + (3500 × 4 × 3/100)
= $3500 + (14000 × 3/100)
= $3500 + (42000/100)
= $3500 + $420 = $3920
Thus, Amount (A) to be paid = $3920 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 $3500, the simple interest in 1 year
= 4/100 × 3500
= 4 × 3500/100
= 14000/100 = $140
Thus, simple interest for 1 year = $140
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $140 × 3 = $420
Thus, Simple Interest (SI) = $420
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $420
= $3920
Thus, Amount to be paid = $3920 Answer
Similar Questions
(1) Paul had to pay $5264 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 Mary borrowed a sum of $3050 at 3% simple interest for 3 years.
(3) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 7 years.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 7 years.
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(7) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if John borrowed a sum of $3100 at a 9% simple interest?
(9) If Jessica borrowed $3750 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 6% simple interest?