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) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 4% simple interest?
(2) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(3) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(6) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $10000 to clear the loan, then find the time period of the loan.
(7) What amount does James have to pay after 6 years if he takes a loan of $3000 at 8% simple interest?
(8) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 3 years.
(9) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 3 years.
(10) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.