Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 4 years.
Correct Answer
$4032
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 3% × 4
= $3600 ×3/100 × 4
= 3600 × 3 × 4/100
= 10800 × 4/100
= 43200/100
= $432
Thus, Simple Interest = $432
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 + $432
= $4032
Thus, Amount to be paid = $4032 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) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 3% × 4)
= $3600 + ($3600 ×3/100 × 4)
= $3600 + (3600 × 3 × 4/100)
= $3600 + (10800 × 4/100)
= $3600 + (43200/100)
= $3600 + $432 = $4032
Thus, Amount (A) to be paid = $4032 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 $3600, the simple interest in 1 year
= 3/100 × 3600
= 3 × 3600/100
= 10800/100 = $108
Thus, simple interest for 1 year = $108
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $108 × 4 = $432
Thus, Simple Interest (SI) = $432
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $432
= $4032
Thus, Amount to be paid = $4032 Answer
Similar Questions
(1) Find the amount to be paid if Mary borrowed a sum of $5050 at 6% simple interest for 8 years.
(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(3) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 6% simple interest.
(4) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(6) Andrew had to pay $5232 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Christopher had to pay $4240 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.
(9) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.
(10) Kenneth had to pay $5750 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.