Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 3 years.
Correct Answer
$5070
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 10% × 3
= $3900 ×10/100 × 3
= 3900 × 10 × 3/100
= 39000 × 3/100
= 117000/100
= $1170
Thus, Simple Interest = $1170
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 = $3900 + $1170
= $5070
Thus, Amount to be paid = $5070 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 = $3900
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3900 + ($3900 × 10% × 3)
= $3900 + ($3900 ×10/100 × 3)
= $3900 + (3900 × 10 × 3/100)
= $3900 + (39000 × 3/100)
= $3900 + (117000/100)
= $3900 + $1170 = $5070
Thus, Amount (A) to be paid = $5070 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 $3900, the simple interest in 1 year
= 10/100 × 3900
= 10 × 3900/100
= 39000/100 = $390
Thus, simple interest for 1 year = $390
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $390 × 3 = $1170
Thus, Simple Interest (SI) = $1170
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $1170
= $5070
Thus, Amount to be paid = $5070 Answer
Similar Questions
(1) What amount does James have to pay after 5 years if he takes a loan of $3000 at 4% simple interest?
(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.
(3) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(4) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.
(5) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 7 years.
(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 7 years.
(9) How much loan did Charles borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6785 to clear it?
(10) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 6% simple interest?