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) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(2) What amount does David have to pay after 6 years if he takes a loan of $3400 at 8% simple interest?
(3) Michelle had to pay $5692.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 8 years.
(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?
(6) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(8) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 2% simple interest.
(9) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.