Question:
Calculate the amount due if Patricia borrowed a sum of $3150 at 6% simple interest for 4 years.
Correct Answer
$3906
Solution And Explanation
Solution
Given,
Principal (P) = $3150
Rate of Simple Interest (SI) = 6%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $3150 × 6% × 4
= $3150 ×6/100 × 4
= 3150 × 6 × 4/100
= 18900 × 4/100
= 75600/100
= $756
Thus, Simple Interest = $756
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 = $3150 + $756
= $3906
Thus, Amount to be paid = $3906 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 = $3150
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3150 + ($3150 × 6% × 4)
= $3150 + ($3150 ×6/100 × 4)
= $3150 + (3150 × 6 × 4/100)
= $3150 + (18900 × 4/100)
= $3150 + (75600/100)
= $3150 + $756 = $3906
Thus, Amount (A) to be paid = $3906 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3150, the simple interest in 1 year
= 6/100 × 3150
= 6 × 3150/100
= 18900/100 = $189
Thus, simple interest for 1 year = $189
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $189 × 4 = $756
Thus, Simple Interest (SI) = $756
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $756
= $3906
Thus, Amount to be paid = $3906 Answer
Similar Questions
(1) How much loan did Brian borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8640 to clear it?
(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 7 years.
(3) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 6% simple interest?
(4) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.
(5) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.
(7) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(8) Michelle had to pay $5544 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) How much loan did Andrew borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7820 to clear it?
(10) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9562.5 to clear it?