Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 3 years.
Correct Answer
$4836
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 8% × 3
= $3900 ×8/100 × 3
= 3900 × 8 × 3/100
= 31200 × 3/100
= 93600/100
= $936
Thus, Simple Interest = $936
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 + $936
= $4836
Thus, Amount to be paid = $4836 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) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3900 + ($3900 × 8% × 3)
= $3900 + ($3900 ×8/100 × 3)
= $3900 + (3900 × 8 × 3/100)
= $3900 + (31200 × 3/100)
= $3900 + (93600/100)
= $3900 + $936 = $4836
Thus, Amount (A) to be paid = $4836 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 $3900, the simple interest in 1 year
= 8/100 × 3900
= 8 × 3900/100
= 31200/100 = $312
Thus, simple interest for 1 year = $312
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $312 × 3 = $936
Thus, Simple Interest (SI) = $936
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $936
= $4836
Thus, Amount to be paid = $4836 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(2) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(3) Donald had to pay $5040 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 7% simple interest?
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.
(6) How much loan did Barbara borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6105 to clear it?
(7) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5775 to clear it?
(8) How much loan did Richard borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7000 to clear it?
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 3 years.
(10) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.