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) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.
(2) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $11800 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 7 years.
(4) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(5) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 3 years.
(8) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 3 years.
(9) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(10) Paul had to pay $5264 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.