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) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7140 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if William borrowed a sum of $3250 at a 7% simple interest?
(3) What amount does James have to pay after 6 years if he takes a loan of $3000 at 4% simple interest?
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 7 years.
(5) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10132 to clear the loan, then find the time period of the loan.
(6) What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?
(7) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 4 years.
(8) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(9) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 7 years.