Question:
Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 3 years.
Correct Answer
$4130
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 6%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $3500 × 6% × 3
= $3500 ×6/100 × 3
= 3500 × 6 × 3/100
= 21000 × 3/100
= 63000/100
= $630
Thus, Simple Interest = $630
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 = $3500 + $630
= $4130
Thus, Amount to be paid = $4130 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 = $3500
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 3 years
Thus, Amount (A)
= $3500 + ($3500 × 6% × 3)
= $3500 + ($3500 ×6/100 × 3)
= $3500 + (3500 × 6 × 3/100)
= $3500 + (21000 × 3/100)
= $3500 + (63000/100)
= $3500 + $630 = $4130
Thus, Amount (A) to be paid = $4130 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3500, the simple interest in 1 year
= 6/100 × 3500
= 6 × 3500/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $210 × 3 = $630
Thus, Simple Interest (SI) = $630
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $630
= $4130
Thus, Amount to be paid = $4130 Answer
Similar Questions
(1) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 5% simple interest?
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 5% simple interest for 4 years.
(3) Anthony had to pay $4558 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7172 to clear the loan, then find the time period of the loan.
(5) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6705 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 3 years.
(7) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3100 will amount to $3224 at a simple interest of 2% per annum?
(9) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?
(10) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 4% simple interest?