Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 3% simple interest for 4 years.
Correct Answer
$4256
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 3% × 4
= $3800 ×3/100 × 4
= 3800 × 3 × 4/100
= 11400 × 4/100
= 45600/100
= $456
Thus, Simple Interest = $456
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 = $3800 + $456
= $4256
Thus, Amount to be paid = $4256 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 = $3800
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3800 + ($3800 × 3% × 4)
= $3800 + ($3800 ×3/100 × 4)
= $3800 + (3800 × 3 × 4/100)
= $3800 + (11400 × 4/100)
= $3800 + (45600/100)
= $3800 + $456 = $4256
Thus, Amount (A) to be paid = $4256 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 $3800, the simple interest in 1 year
= 3/100 × 3800
= 3 × 3800/100
= 11400/100 = $114
Thus, simple interest for 1 year = $114
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $114 × 4 = $456
Thus, Simple Interest (SI) = $456
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $456
= $4256
Thus, Amount to be paid = $4256 Answer
Similar Questions
(1) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 8 years.
(2) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?
(3) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(4) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.
(6) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.
(7) If Linda paid $3752 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?
(9) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 10% simple interest?
(10) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.