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) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?
(2) How much loan did Ronald borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8625 to clear it?
(3) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?
(5) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(6) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(7) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 5% simple interest?
(9) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 6% simple interest?
(10) Emily had to pay $5320 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.