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) In how much time a principal of $3150 will amount to $3528 at a simple interest of 4% per annum?
(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 4 years.
(3) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(4) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9937.5 to clear it?
(5) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(6) If Patricia paid $3654 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 4 years.
(9) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(10) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7992 to clear the loan, then find the time period of the loan.