Question:
Calculate the amount due if David borrowed a sum of $3400 at 6% simple interest for 4 years.
Correct Answer
$4216
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 6% × 4
= $3400 ×6/100 × 4
= 3400 × 6 × 4/100
= 20400 × 4/100
= 81600/100
= $816
Thus, Simple Interest = $816
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 = $3400 + $816
= $4216
Thus, Amount to be paid = $4216 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 = $3400
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3400 + ($3400 × 6% × 4)
= $3400 + ($3400 ×6/100 × 4)
= $3400 + (3400 × 6 × 4/100)
= $3400 + (20400 × 4/100)
= $3400 + (81600/100)
= $3400 + $816 = $4216
Thus, Amount (A) to be paid = $4216 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 $3400, the simple interest in 1 year
= 6/100 × 3400
= 6 × 3400/100
= 20400/100 = $204
Thus, simple interest for 1 year = $204
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $204 × 4 = $816
Thus, Simple Interest (SI) = $816
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $816
= $4216
Thus, Amount to be paid = $4216 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(2) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 3 years.
(4) Find the amount to be paid if David borrowed a sum of $5400 at 7% simple interest for 8 years.
(5) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8750 to clear it?
(6) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(7) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 9% simple interest.
(8) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8337.5 to clear it?
(9) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 4 years.