Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 8% simple interest for 3 years.
Correct Answer
$4464
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 8%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 3
= $3600 ×8/100 × 3
= 3600 × 8 × 3/100
= 28800 × 3/100
= 86400/100
= $864
Thus, Simple Interest = $864
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 + $864
= $4464
Thus, Amount to be paid = $4464 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) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3600 + ($3600 × 8% × 3)
= $3600 + ($3600 ×8/100 × 3)
= $3600 + (3600 × 8 × 3/100)
= $3600 + (28800 × 3/100)
= $3600 + (86400/100)
= $3600 + $864 = $4464
Thus, Amount (A) to be paid = $4464 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3600, the simple interest in 1 year
= 8/100 × 3600
= 8 × 3600/100
= 28800/100 = $288
Thus, simple interest for 1 year = $288
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $288 × 3 = $864
Thus, Simple Interest (SI) = $864
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $864
= $4464
Thus, Amount to be paid = $4464 Answer
Similar Questions
(1) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
(2) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(4) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $11480 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(6) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 6% simple interest.
(8) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(9) How much loan did Carol borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8107.5 to clear it?
(10) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 7% simple interest?