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) How much loan did Edward borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9500 to clear it?
(2) Michelle had to pay $5692.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 7% simple interest.
(4) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12127 to clear the loan, then find the time period of the loan.
(5) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 8% simple interest?
(6) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 3 years.
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(9) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.
(10) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.