Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 3 years.
Correct Answer
$4368
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 4% × 3
= $3900 ×4/100 × 3
= 3900 × 4 × 3/100
= 15600 × 3/100
= 46800/100
= $468
Thus, Simple Interest = $468
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 = $3900 + $468
= $4368
Thus, Amount to be paid = $4368 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 = $3900
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3900 + ($3900 × 4% × 3)
= $3900 + ($3900 ×4/100 × 3)
= $3900 + (3900 × 4 × 3/100)
= $3900 + (15600 × 3/100)
= $3900 + (46800/100)
= $3900 + $468 = $4368
Thus, Amount (A) to be paid = $4368 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 $3900, the simple interest in 1 year
= 4/100 × 3900
= 4 × 3900/100
= 15600/100 = $156
Thus, simple interest for 1 year = $156
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $156 × 3 = $468
Thus, Simple Interest (SI) = $468
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $468
= $4368
Thus, Amount to be paid = $4368 Answer
Similar Questions
(1) If Thomas paid $4560 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 9% simple interest for 3 years.
(3) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 8% simple interest for 7 years.
(4) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 9% simple interest.
(6) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?
(8) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?
(9) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(10) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 8 years.