Question:
Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 4 years.
Correct Answer
$4340
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 6% × 4
= $3500 ×6/100 × 4
= 3500 × 6 × 4/100
= 21000 × 4/100
= 84000/100
= $840
Thus, Simple Interest = $840
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 = $3500 + $840
= $4340
Thus, Amount to be paid = $4340 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 = $3500
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3500 + ($3500 × 6% × 4)
= $3500 + ($3500 ×6/100 × 4)
= $3500 + (3500 × 6 × 4/100)
= $3500 + (21000 × 4/100)
= $3500 + (84000/100)
= $3500 + $840 = $4340
Thus, Amount (A) to be paid = $4340 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 $3500, the simple interest in 1 year
= 6/100 × 3500
= 6 × 3500/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $210 × 4 = $840
Thus, Simple Interest (SI) = $840
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $840
= $4340
Thus, Amount to be paid = $4340 Answer
Similar Questions
(1) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.
(2) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 9% simple interest?
(3) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 8 years.
(4) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11316 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 4 years.
(6) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 8 years.
(8) If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(10) How much loan did Robert borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5865 to clear it?