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) How much loan did Charles borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6785 to clear it?
(2) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8400 to clear it?
(3) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8584 to clear the loan, then find the time period of the loan.
(4) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(5) How much loan did Anthony borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7875 to clear it?
(6) What amount does James have to pay after 5 years if he takes a loan of $3000 at 2% simple interest?
(7) Margaret had to pay $4872 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Thomas had to pay $4370 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(10) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 3 years.