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) If Matthew paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 3% simple interest?
(3) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 4% simple interest?
(5) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 9% simple interest?
(6) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 8 years.
(8) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 10% simple interest?
(9) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 7% simple interest?
(10) How much loan did Laura borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9027.5 to clear it?