Question:
Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 4 years.
Correct Answer
$3840
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 5%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3200 × 5% × 4
= $3200 ×5/100 × 4
= 3200 × 5 × 4/100
= 16000 × 4/100
= 64000/100
= $640
Thus, Simple Interest = $640
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 = $3200 + $640
= $3840
Thus, Amount to be paid = $3840 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 = $3200
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3200 + ($3200 × 5% × 4)
= $3200 + ($3200 ×5/100 × 4)
= $3200 + (3200 × 5 × 4/100)
= $3200 + (16000 × 4/100)
= $3200 + (64000/100)
= $3200 + $640 = $3840
Thus, Amount (A) to be paid = $3840 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3200, the simple interest in 1 year
= 5/100 × 3200
= 5 × 3200/100
= 16000/100 = $160
Thus, simple interest for 1 year = $160
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $160 × 4 = $640
Thus, Simple Interest (SI) = $640
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $640
= $3840
Thus, Amount to be paid = $3840 Answer
Similar Questions
(1) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 4 years.
(2) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 7% simple interest?
(3) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.
(4) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(6) Richard had to pay $3816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) If Donald paid $5040 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) 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.
(10) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.