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) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7548 to clear the loan, then find the time period of the loan.
(2) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 2% simple interest?
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 8 years.
(5) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(7) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(9) How much loan did Emily borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7425 to clear it?
(10) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7172 to clear the loan, then find the time period of the loan.