Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 4 years.
Correct Answer
$4524
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 4% × 4
= $3900 ×4/100 × 4
= 3900 × 4 × 4/100
= 15600 × 4/100
= 62400/100
= $624
Thus, Simple Interest = $624
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 = $3900 + $624
= $4524
Thus, Amount to be paid = $4524 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 = $3900
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3900 + ($3900 × 4% × 4)
= $3900 + ($3900 ×4/100 × 4)
= $3900 + (3900 × 4 × 4/100)
= $3900 + (15600 × 4/100)
= $3900 + (62400/100)
= $3900 + $624 = $4524
Thus, Amount (A) to be paid = $4524 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 $3900, the simple interest in 1 year
= 4/100 × 3900
= 4 × 3900/100
= 15600/100 = $156
Thus, simple interest for 1 year = $156
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $156 × 4 = $624
Thus, Simple Interest (SI) = $624
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $624
= $4524
Thus, Amount to be paid = $4524 Answer
Similar Questions
(1) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 8 years.
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.
(3) What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(5) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 4 years.
(8) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.
(9) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
(10) If Steven paid $5336 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.