Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 3 years.
Correct Answer
$4356
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 7%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 3
= $3600 ×7/100 × 3
= 3600 × 7 × 3/100
= 25200 × 3/100
= 75600/100
= $756
Thus, Simple Interest = $756
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 + $756
= $4356
Thus, Amount to be paid = $4356 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) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3600 + ($3600 × 7% × 3)
= $3600 + ($3600 ×7/100 × 3)
= $3600 + (3600 × 7 × 3/100)
= $3600 + (25200 × 3/100)
= $3600 + (75600/100)
= $3600 + $756 = $4356
Thus, Amount (A) to be paid = $4356 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3600, the simple interest in 1 year
= 7/100 × 3600
= 7 × 3600/100
= 25200/100 = $252
Thus, simple interest for 1 year = $252
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $252 × 3 = $756
Thus, Simple Interest (SI) = $756
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $756
= $4356
Thus, Amount to be paid = $4356 Answer
Similar Questions
(1) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.
(2) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 3% simple interest?
(3) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 8 years.
(5) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $11600 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 7 years.
(7) If James paid $3240 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 7 years.
(9) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 7 years.