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) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 3 years.
(2) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(4) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 7 years.
(7) In how much time a principal of $3000 will amount to $3360 at a simple interest of 3% per annum?
(8) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.
(9) Susan had to pay $4197.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.