Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 4 years.
Correct Answer
$4380
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 5% × 4
= $3650 ×5/100 × 4
= 3650 × 5 × 4/100
= 18250 × 4/100
= 73000/100
= $730
Thus, Simple Interest = $730
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 = $3650 + $730
= $4380
Thus, Amount to be paid = $4380 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 = $3650
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3650 + ($3650 × 5% × 4)
= $3650 + ($3650 ×5/100 × 4)
= $3650 + (3650 × 5 × 4/100)
= $3650 + (18250 × 4/100)
= $3650 + (73000/100)
= $3650 + $730 = $4380
Thus, Amount (A) to be paid = $4380 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 $3650, the simple interest in 1 year
= 5/100 × 3650
= 5 × 3650/100
= 18250/100 = $182.5
Thus, simple interest for 1 year = $182.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $182.5 × 4 = $730
Thus, Simple Interest (SI) = $730
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $730
= $4380
Thus, Amount to be paid = $4380 Answer
Similar Questions
(1) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 10% simple interest?
(3) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 2% simple interest?
(4) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.
(5) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 10% simple interest.
(6) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?
(7) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.
(9) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 6% simple interest?
(10) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.