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) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(2) If Andrew paid $5376 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) How much loan did William borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6600 to clear it?
(4) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?
(5) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8312.5 to clear it?
(6) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 5% simple interest?
(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 7 years.
(8) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 10% simple interest?
(9) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 8 years.
(10) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 7 years.