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) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
(2) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 3 years.
(4) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 8 years.
(5) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 8 years.
(6) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(7) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 3% simple interest?
(8) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8432 to clear the loan, then find the time period of the loan.
(9) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.
(10) Betty had to pay $4505 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.