Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 10% simple interest for 3 years.
Correct Answer
$4680
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 10%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 3
= $3600 ×10/100 × 3
= 3600 × 10 × 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 = $3600 + $1080
= $4680
Thus, Amount to be paid = $4680 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) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3600 + ($3600 × 10% × 3)
= $3600 + ($3600 ×10/100 × 3)
= $3600 + (3600 × 10 × 3/100)
= $3600 + (36000 × 3/100)
= $3600 + (108000/100)
= $3600 + $1080 = $4680
Thus, Amount (A) to be paid = $4680 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3600, the simple interest in 1 year
= 10/100 × 3600
= 10 × 3600/100
= 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 = $3600 + $1080
= $4680
Thus, Amount to be paid = $4680 Answer
Similar Questions
(1) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 8 years.
(3) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9750 to clear it?
(4) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 5% simple interest?
(5) If Betty paid $5100 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(7) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(8) Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 4 years.
(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 7% simple interest.
(10) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.