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) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 4% simple interest.
(3) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $11040 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 8 years.
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 3 years.
(6) If Joseph paid $4144 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) How much loan did Brian borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8280 to clear it?
(8) How much loan did Emily borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7425 to clear it?
(9) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9089 to clear the loan, then find the time period of the loan.
(10) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $9472 to clear the loan, then find the time period of the loan.