Question:
( 3 of 10 ) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
(A) 11 19/46 days or 11.413 days
(B) 22 19/46 days or 22.413 days
(C) 46 days
(D) 23 days
You selected
$3500
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) How much loan did Ashley borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7860 to clear it?
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 4 years.
(3) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5995 to clear it?
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 7% simple interest?
(5) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 3 years.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 7 years.
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 9% simple interest for 4 years.
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.
(9) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 7 years.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.