Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 5% simple interest for 4 years.
Correct Answer
$4320
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 5% × 4
= $3600 ×5/100 × 4
= 3600 × 5 × 4/100
= 18000 × 4/100
= 72000/100
= $720
Thus, Simple Interest = $720
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 = $3600 + $720
= $4320
Thus, Amount to be paid = $4320 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 = $3600
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 5% × 4)
= $3600 + ($3600 ×5/100 × 4)
= $3600 + (3600 × 5 × 4/100)
= $3600 + (18000 × 4/100)
= $3600 + (72000/100)
= $3600 + $720 = $4320
Thus, Amount (A) to be paid = $4320 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 $3600, the simple interest in 1 year
= 5/100 × 3600
= 5 × 3600/100
= 18000/100 = $180
Thus, simple interest for 1 year = $180
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $180 × 4 = $720
Thus, Simple Interest (SI) = $720
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $720
= $4320
Thus, Amount to be paid = $4320 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6683 to clear the loan, then find the time period of the loan.
(2) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 3 years.
(4) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(5) Matthew had to pay $4830 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 9% simple interest?
(7) How much loan did Michelle borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7992.5 to clear it?
(8) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 3% simple interest?
(9) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(10) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.