Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 4 years.
Correct Answer
$4176
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 4%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 4
= $3600 ×4/100 × 4
= 3600 × 4 × 4/100
= 14400 × 4/100
= 57600/100
= $576
Thus, Simple Interest = $576
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 + $576
= $4176
Thus, Amount to be paid = $4176 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) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 4% × 4)
= $3600 + ($3600 ×4/100 × 4)
= $3600 + (3600 × 4 × 4/100)
= $3600 + (14400 × 4/100)
= $3600 + (57600/100)
= $3600 + $576 = $4176
Thus, Amount (A) to be paid = $4176 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3600, the simple interest in 1 year
= 4/100 × 3600
= 4 × 3600/100
= 14400/100 = $144
Thus, simple interest for 1 year = $144
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $144 × 4 = $576
Thus, Simple Interest (SI) = $576
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $576
= $4176
Thus, Amount to be paid = $4176 Answer
Similar Questions
(1) Karen had to pay $4305.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 7 years.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.
(4) If Mary borrowed $3050 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.
(6) How much loan did William borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6325 to clear it?
(7) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
(8) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(9) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 10% simple interest?
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.