Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 3 years.
Correct Answer
$4485
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 5% × 3
= $3900 ×5/100 × 3
= 3900 × 5 × 3/100
= 19500 × 3/100
= 58500/100
= $585
Thus, Simple Interest = $585
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 + $585
= $4485
Thus, Amount to be paid = $4485 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) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3900 + ($3900 × 5% × 3)
= $3900 + ($3900 ×5/100 × 3)
= $3900 + (3900 × 5 × 3/100)
= $3900 + (19500 × 3/100)
= $3900 + (58500/100)
= $3900 + $585 = $4485
Thus, Amount (A) to be paid = $4485 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 $3900, the simple interest in 1 year
= 5/100 × 3900
= 5 × 3900/100
= 19500/100 = $195
Thus, simple interest for 1 year = $195
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $195 × 3 = $585
Thus, Simple Interest (SI) = $585
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $585
= $4485
Thus, Amount to be paid = $4485 Answer
Similar Questions
(1) William had to pay $4025 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 3 years.
(3) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(4) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 8 years.
(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 8 years.
(6) In how much time a principal of $3100 will amount to $3224 at a simple interest of 2% per annum?
(7) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?
(8) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(10) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 4 years.