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) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9900 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 3 years.
(3) What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 2% simple interest?
(5) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 3 years.
(6) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(7) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(8) If Robert borrowed $3100 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 3 years.
(10) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?