Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 4% simple interest for 4 years.
Correct Answer
$4234
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 4% × 4
= $3650 ×4/100 × 4
= 3650 × 4 × 4/100
= 14600 × 4/100
= 58400/100
= $584
Thus, Simple Interest = $584
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 = $3650 + $584
= $4234
Thus, Amount to be paid = $4234 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 = $3650
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3650 + ($3650 × 4% × 4)
= $3650 + ($3650 ×4/100 × 4)
= $3650 + (3650 × 4 × 4/100)
= $3650 + (14600 × 4/100)
= $3650 + (58400/100)
= $3650 + $584 = $4234
Thus, Amount (A) to be paid = $4234 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 $3650, the simple interest in 1 year
= 4/100 × 3650
= 4 × 3650/100
= 14600/100 = $146
Thus, simple interest for 1 year = $146
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $146 × 4 = $584
Thus, Simple Interest (SI) = $584
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $584
= $4234
Thus, Amount to be paid = $4234 Answer
Similar Questions
(1) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?
(2) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?
(3) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 4 years.
(4) In how much time a principal of $3150 will amount to $3780 at a simple interest of 4% per annum?
(5) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 8 years.
(6) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(7) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 8% simple interest?
(8) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(9) Thomas had to pay $4256 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 5% simple interest?