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) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(2) Kenneth had to pay $5600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 10% simple interest?
(5) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(6) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.
(7) 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.
(8) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 3% simple interest.
(9) How much loan did Laura borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9027.5 to clear it?
(10) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.