Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 4 years.
Correct Answer
$4680
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 5% × 4
= $3900 ×5/100 × 4
= 3900 × 5 × 4/100
= 19500 × 4/100
= 78000/100
= $780
Thus, Simple Interest = $780
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 + $780
= $4680
Thus, Amount to be paid = $4680 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) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3900 + ($3900 × 5% × 4)
= $3900 + ($3900 ×5/100 × 4)
= $3900 + (3900 × 5 × 4/100)
= $3900 + (19500 × 4/100)
= $3900 + (78000/100)
= $3900 + $780 = $4680
Thus, Amount (A) to be paid = $4680 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 $3900, the simple interest in 1 year
= 5/100 × 3900
= 5 × 3900/100
= 19500/100 = $195
Thus, simple interest for 1 year = $195
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $195 × 4 = $780
Thus, Simple Interest (SI) = $780
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $780
= $4680
Thus, Amount to be paid = $4680 Answer
Similar Questions
(1) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 9% simple interest?
(3) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?
(4) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
(5) If Karen paid $4266 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 3% simple interest.
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
(8) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(9) If Michael paid $3696 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 7% simple interest for 3 years.