Question:
Calculate the amount due if Christopher borrowed a sum of $4000 at 9% simple interest for 3 years.
Correct Answer
$5080
Solution And Explanation
Solution
Given,
Principal (P) = $4000
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) = $4000 × 9% × 3
= $4000 ×9/100 × 3
= 4000 × 9 × 3/100
= 36000 × 3/100
= 108000/100
= $1080
Thus, Simple Interest = $1080
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 = $4000 + $1080
= $5080
Thus, Amount to be paid = $5080 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 = $4000
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 3 years
Thus, Amount (A)
= $4000 + ($4000 × 9% × 3)
= $4000 + ($4000 ×9/100 × 3)
= $4000 + (4000 × 9 × 3/100)
= $4000 + (36000 × 3/100)
= $4000 + (108000/100)
= $4000 + $1080 = $5080
Thus, Amount (A) to be paid = $5080 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 $4000, the simple interest in 1 year
= 9/100 × 4000
= 9 × 4000/100
= 36000/100 = $360
Thus, simple interest for 1 year = $360
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $360 × 3 = $1080
Thus, Simple Interest (SI) = $1080
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $1080
= $5080
Thus, Amount to be paid = $5080 Answer
Similar Questions
(1) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?
(3) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 5% simple interest?
(4) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8692 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 8 years.
(7) If Donald paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
(10) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 4 years.