Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 3 years.
Correct Answer
$4598
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 7% × 3
= $3800 ×7/100 × 3
= 3800 × 7 × 3/100
= 26600 × 3/100
= 79800/100
= $798
Thus, Simple Interest = $798
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 = $3800 + $798
= $4598
Thus, Amount to be paid = $4598 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 = $3800
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3800 + ($3800 × 7% × 3)
= $3800 + ($3800 ×7/100 × 3)
= $3800 + (3800 × 7 × 3/100)
= $3800 + (26600 × 3/100)
= $3800 + (79800/100)
= $3800 + $798 = $4598
Thus, Amount (A) to be paid = $4598 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 $3800, the simple interest in 1 year
= 7/100 × 3800
= 7 × 3800/100
= 26600/100 = $266
Thus, simple interest for 1 year = $266
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $266 × 3 = $798
Thus, Simple Interest (SI) = $798
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $798
= $4598
Thus, Amount to be paid = $4598 Answer
Similar Questions
(1) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(2) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 8 years.
(4) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 2% simple interest?
(5) What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?
(6) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9983 to clear the loan, then find the time period of the loan.
(7) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 10% simple interest?
(8) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 9% simple interest?
(9) What amount will be due after 2 years if John borrowed a sum of $3100 at a 6% simple interest?
(10) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 6% simple interest?