Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 5% simple interest for 3 years.
Correct Answer
$4140
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 5%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3600 × 5% × 3
= $3600 ×5/100 × 3
= 3600 × 5 × 3/100
= 18000 × 3/100
= 54000/100
= $540
Thus, Simple Interest = $540
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 = $3600 + $540
= $4140
Thus, Amount to be paid = $4140 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 = $3600
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3600 + ($3600 × 5% × 3)
= $3600 + ($3600 ×5/100 × 3)
= $3600 + (3600 × 5 × 3/100)
= $3600 + (18000 × 3/100)
= $3600 + (54000/100)
= $3600 + $540 = $4140
Thus, Amount (A) to be paid = $4140 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3600, the simple interest in 1 year
= 5/100 × 3600
= 5 × 3600/100
= 18000/100 = $180
Thus, simple interest for 1 year = $180
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $180 × 3 = $540
Thus, Simple Interest (SI) = $540
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $540
= $4140
Thus, Amount to be paid = $4140 Answer
Similar Questions
(1) Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 4 years.
(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 3 years.
(3) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 8 years.
(4) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9840 to clear the loan, then find the time period of the loan.
(5) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.
(7) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $10640 to clear the loan, then find the time period of the loan.
(8) Charles had to pay $4368 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 9% simple interest?
(10) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.