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) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 7% simple interest?
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.
(3) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 4 years.
(4) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(5) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 6% simple interest?
(6) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 4 years.
(8) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?
(9) If Elizabeth paid $3726 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 8% simple interest?