Question:
Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 3 years.
Correct Answer
$4840
Solution And Explanation
Solution
Given,
Principal (P) = $4000
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) = $4000 × 7% × 3
= $4000 ×7/100 × 3
= 4000 × 7 × 3/100
= 28000 × 3/100
= 84000/100
= $840
Thus, Simple Interest = $840
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 = $4000 + $840
= $4840
Thus, Amount to be paid = $4840 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 = $4000
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $4000 + ($4000 × 7% × 3)
= $4000 + ($4000 ×7/100 × 3)
= $4000 + (4000 × 7 × 3/100)
= $4000 + (28000 × 3/100)
= $4000 + (84000/100)
= $4000 + $840 = $4840
Thus, Amount (A) to be paid = $4840 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 $4000, the simple interest in 1 year
= 7/100 × 4000
= 7 × 4000/100
= 28000/100 = $280
Thus, simple interest for 1 year = $280
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $280 × 3 = $840
Thus, Simple Interest (SI) = $840
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $840
= $4840
Thus, Amount to be paid = $4840 Answer
Similar Questions
(1) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 4% simple interest?
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 4% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 10% simple interest.
(5) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) How much loan did Linda borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6687.5 to clear it?
(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 4% simple interest?
(8) What amount does John have to pay after 6 years if he takes a loan of $3200 at 7% simple interest?
(9) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 3 years.
(10) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.