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) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 3 years.
(3) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?
(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.
(7) If Charles paid $4368 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(9) 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.
(10) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.