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) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
(2) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(5) If Emily paid $5700 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10679 to clear the loan, then find the time period of the loan.
(7) Anthony had to pay $4945 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?
(9) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.
(10) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 8 years.