Question:
Calculate the amount due if William borrowed a sum of $3500 at 9% simple interest for 3 years.
Correct Answer
$4445
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 9%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3500 × 9% × 3
= $3500 ×9/100 × 3
= 3500 × 9 × 3/100
= 31500 × 3/100
= 94500/100
= $945
Thus, Simple Interest = $945
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 = $3500 + $945
= $4445
Thus, Amount to be paid = $4445 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 = $3500
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 3 years
Thus, Amount (A)
= $3500 + ($3500 × 9% × 3)
= $3500 + ($3500 ×9/100 × 3)
= $3500 + (3500 × 9 × 3/100)
= $3500 + (31500 × 3/100)
= $3500 + (94500/100)
= $3500 + $945 = $4445
Thus, Amount (A) to be paid = $4445 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3500, the simple interest in 1 year
= 9/100 × 3500
= 9 × 3500/100
= 31500/100 = $315
Thus, simple interest for 1 year = $315
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $315 × 3 = $945
Thus, Simple Interest (SI) = $945
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $945
= $4445
Thus, Amount to be paid = $4445 Answer
Similar Questions
(1) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(2) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 8% simple interest?
(3) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(4) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10332 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 8 years.
(7) How much loan did James borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5750 to clear it?
(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 8 years.
(9) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(10) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.