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) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(2) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 7% simple interest?
(3) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(4) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 4 years.
(6) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 3 years.
(9) What amount does William have to pay after 5 years if he takes a loan of $3500 at 6% simple interest?
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 3 years.