Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 3 years.
Correct Answer
$4572
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 9% × 3
= $3600 ×9/100 × 3
= 3600 × 9 × 3/100
= 32400 × 3/100
= 97200/100
= $972
Thus, Simple Interest = $972
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 = $3600 + $972
= $4572
Thus, Amount to be paid = $4572 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 = $3600
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 3 years
Thus, Amount (A)
= $3600 + ($3600 × 9% × 3)
= $3600 + ($3600 ×9/100 × 3)
= $3600 + (3600 × 9 × 3/100)
= $3600 + (32400 × 3/100)
= $3600 + (97200/100)
= $3600 + $972 = $4572
Thus, Amount (A) to be paid = $4572 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 $3600, the simple interest in 1 year
= 9/100 × 3600
= 9 × 3600/100
= 32400/100 = $324
Thus, simple interest for 1 year = $324
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $324 × 3 = $972
Thus, Simple Interest (SI) = $972
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $972
= $4572
Thus, Amount to be paid = $4572 Answer
Similar Questions
(1) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 5% simple interest?
(2) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(3) How much loan did Ronald borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9000 to clear it?
(4) 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?
(5) Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 7 years.
(6) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.
(7) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(8) What amount does David have to pay after 6 years if he takes a loan of $3400 at 10% simple interest?
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 7 years.
(10) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 8% simple interest?