Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.
Correct Answer
$4719
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 7% × 3
= $3900 ×7/100 × 3
= 3900 × 7 × 3/100
= 27300 × 3/100
= 81900/100
= $819
Thus, Simple Interest = $819
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 = $3900 + $819
= $4719
Thus, Amount to be paid = $4719 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 = $3900
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3900 + ($3900 × 7% × 3)
= $3900 + ($3900 ×7/100 × 3)
= $3900 + (3900 × 7 × 3/100)
= $3900 + (27300 × 3/100)
= $3900 + (81900/100)
= $3900 + $819 = $4719
Thus, Amount (A) to be paid = $4719 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 $3900, the simple interest in 1 year
= 7/100 × 3900
= 7 × 3900/100
= 27300/100 = $273
Thus, simple interest for 1 year = $273
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $273 × 3 = $819
Thus, Simple Interest (SI) = $819
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $819
= $4719
Thus, Amount to be paid = $4719 Answer
Similar Questions
(1) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 3 years.
(3) Donald had to pay $4905 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 3 years.
(5) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 8% simple interest?
(6) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9387 to clear the loan, then find the time period of the loan.
(7) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(8) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 5% simple interest?
(9) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(10) How much loan did John borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6240 to clear it?