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) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $9798 to clear the loan, then find the time period of the loan.
(2) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.
(3) Patricia had to pay $3433.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 3 years.
(5) How much loan did Daniel borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7015 to clear it?
(6) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 9% simple interest?
(7) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?
(8) What amount will be due after 2 years if William borrowed a sum of $3250 at a 4% simple interest?
(9) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.
(10) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.