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) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.
(2) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 3% simple interest?
(3) If Thomas paid $4256 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) If James paid $3360 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(8) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 7 years.
(10) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 10% simple interest?