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 Michael borrowed a sum of $3150 at a 4% simple interest?
(2) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 8 years.
(4) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $12489 to clear the loan, then find the time period of the loan.
(5) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8094 to clear the loan, then find the time period of the loan.
(6) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(7) How much loan did Edward borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9120 to clear it?
(8) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9834 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 3 years.
(10) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 4 years.