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) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
(3) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 3 years.
(5) If Anthony paid $5160 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 9% simple interest.
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?
(10) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 4% simple interest?