Question:
Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 4 years.
Correct Answer
$3920
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 3%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3500 × 3% × 4
= $3500 ×3/100 × 4
= 3500 × 3 × 4/100
= 10500 × 4/100
= 42000/100
= $420
Thus, Simple Interest = $420
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 = $3500 + $420
= $3920
Thus, Amount to be paid = $3920 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 = $3500
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3500 + ($3500 × 3% × 4)
= $3500 + ($3500 ×3/100 × 4)
= $3500 + (3500 × 3 × 4/100)
= $3500 + (10500 × 4/100)
= $3500 + (42000/100)
= $3500 + $420 = $3920
Thus, Amount (A) to be paid = $3920 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3500, the simple interest in 1 year
= 3/100 × 3500
= 3 × 3500/100
= 10500/100 = $105
Thus, simple interest for 1 year = $105
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $105 × 4 = $420
Thus, Simple Interest (SI) = $420
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $420
= $3920
Thus, Amount to be paid = $3920 Answer
Similar Questions
(1) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 7 years.
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(5) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 7 years.
(7) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 7 years.
(9) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(10) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 2% simple interest?