Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.
Correct Answer
$4256
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 4% × 3
= $3800 ×4/100 × 3
= 3800 × 4 × 3/100
= 15200 × 3/100
= 45600/100
= $456
Thus, Simple Interest = $456
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 = $3800 + $456
= $4256
Thus, Amount to be paid = $4256 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 = $3800
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3800 + ($3800 × 4% × 3)
= $3800 + ($3800 ×4/100 × 3)
= $3800 + (3800 × 4 × 3/100)
= $3800 + (15200 × 3/100)
= $3800 + (45600/100)
= $3800 + $456 = $4256
Thus, Amount (A) to be paid = $4256 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 $3800, the simple interest in 1 year
= 4/100 × 3800
= 4 × 3800/100
= 15200/100 = $152
Thus, simple interest for 1 year = $152
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $152 × 3 = $456
Thus, Simple Interest (SI) = $456
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $456
= $4256
Thus, Amount to be paid = $4256 Answer
Similar Questions
(1) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 7 years.
(2) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.
(3) What amount does William have to pay after 6 years if he takes a loan of $3500 at 2% simple interest?
(4) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?
(5) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 3% per annum?
(6) Robert had to pay $3379 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.
(8) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(9) In how much time a principal of $3200 will amount to $3456 at a simple interest of 4% per annum?
(10) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 10% simple interest.