Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 4 years.
Correct Answer
$4464
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 6% × 4
= $3600 ×6/100 × 4
= 3600 × 6 × 4/100
= 21600 × 4/100
= 86400/100
= $864
Thus, Simple Interest = $864
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 = $3600 + $864
= $4464
Thus, Amount to be paid = $4464 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 = $3600
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 6% × 4)
= $3600 + ($3600 ×6/100 × 4)
= $3600 + (3600 × 6 × 4/100)
= $3600 + (21600 × 4/100)
= $3600 + (86400/100)
= $3600 + $864 = $4464
Thus, Amount (A) to be paid = $4464 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 $3600, the simple interest in 1 year
= 6/100 × 3600
= 6 × 3600/100
= 21600/100 = $216
Thus, simple interest for 1 year = $216
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $216 × 4 = $864
Thus, Simple Interest (SI) = $864
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $864
= $4464
Thus, Amount to be paid = $4464 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6109 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if William borrowed a sum of $3250 at a 9% simple interest?
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 8 years.
(4) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(5) How much loan did Amanda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8222.5 to clear it?
(6) Donna had to pay $5577.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
(8) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 9% simple interest?
(9) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 3 years.
(10) Patricia had to pay $3622.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.