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) How much loan did Betty borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6875 to clear it?
(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 5% simple interest for 8 years.
(3) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 9% simple interest?
(4) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 3 years.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.
(7) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3200 will amount to $3456 at a simple interest of 4% per annum?
(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.
(10) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6392 to clear the loan, then find the time period of the loan.