Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 3 years.
Correct Answer
$4032
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 4% × 3
= $3600 ×4/100 × 3
= 3600 × 4 × 3/100
= 14400 × 3/100
= 43200/100
= $432
Thus, Simple Interest = $432
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 = $3600 + $432
= $4032
Thus, Amount to be paid = $4032 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 = $3600
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3600 + ($3600 × 4% × 3)
= $3600 + ($3600 ×4/100 × 3)
= $3600 + (3600 × 4 × 3/100)
= $3600 + (14400 × 3/100)
= $3600 + (43200/100)
= $3600 + $432 = $4032
Thus, Amount (A) to be paid = $4032 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 $3600, the simple interest in 1 year
= 4/100 × 3600
= 4 × 3600/100
= 14400/100 = $144
Thus, simple interest for 1 year = $144
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $144 × 3 = $432
Thus, Simple Interest (SI) = $432
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $432
= $4032
Thus, Amount to be paid = $4032 Answer
Similar Questions
(1) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(2) What amount does David have to pay after 6 years if he takes a loan of $3400 at 7% simple interest?
(3) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8528 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 7 years.
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 4% simple interest?
(6) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(7) How much loan did Ryan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9480 to clear it?
(8) Emily had to pay $5320 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $13300 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 10% simple interest?