Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 4% simple interest for 3 years.
Correct Answer
$4088
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 4% × 3
= $3650 ×4/100 × 3
= 3650 × 4 × 3/100
= 14600 × 3/100
= 43800/100
= $438
Thus, Simple Interest = $438
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 = $3650 + $438
= $4088
Thus, Amount to be paid = $4088 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 = $3650
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3650 + ($3650 × 4% × 3)
= $3650 + ($3650 ×4/100 × 3)
= $3650 + (3650 × 4 × 3/100)
= $3650 + (14600 × 3/100)
= $3650 + (43800/100)
= $3650 + $438 = $4088
Thus, Amount (A) to be paid = $4088 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 $3650, the simple interest in 1 year
= 4/100 × 3650
= 4 × 3650/100
= 14600/100 = $146
Thus, simple interest for 1 year = $146
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $146 × 3 = $438
Thus, Simple Interest (SI) = $438
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $438
= $4088
Thus, Amount to be paid = $4088 Answer
Similar Questions
(1) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 7 years.
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 8 years.
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 7 years.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 8 years.
(5) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(6) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $9310 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if William borrowed a sum of $3250 at a 9% simple interest?
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 7 years.
(9) How much loan did Mark borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7680 to clear it?
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 7 years.