Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 4 years.
Correct Answer
$4408
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 4% × 4
= $3800 ×4/100 × 4
= 3800 × 4 × 4/100
= 15200 × 4/100
= 60800/100
= $608
Thus, Simple Interest = $608
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 = $3800 + $608
= $4408
Thus, Amount to be paid = $4408 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 = $3800
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3800 + ($3800 × 4% × 4)
= $3800 + ($3800 ×4/100 × 4)
= $3800 + (3800 × 4 × 4/100)
= $3800 + (15200 × 4/100)
= $3800 + (60800/100)
= $3800 + $608 = $4408
Thus, Amount (A) to be paid = $4408 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 $3800, the simple interest in 1 year
= 4/100 × 3800
= 4 × 3800/100
= 15200/100 = $152
Thus, simple interest for 1 year = $152
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $152 × 4 = $608
Thus, Simple Interest (SI) = $608
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $608
= $4408
Thus, Amount to be paid = $4408 Answer
Similar Questions
(1) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 8 years.
(2) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.
(3) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(4) Donald had to pay $4905 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) If Barbara paid $3834 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 8 years.
(7) In how much time a principal of $3000 will amount to $3480 at a simple interest of 4% per annum?
(8) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
(9) How much loan did John borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6500 to clear it?
(10) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.