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) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 4 years.
(3) What amount does John have to pay after 5 years if he takes a loan of $3200 at 5% simple interest?
(4) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5775 to clear it?
(5) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 8 years.
(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 7 years.
(8) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?
(9) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $8360 to clear the loan, then find the time period of the loan.
(10) Sandra had to pay $5117.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.