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) What amount does William have to pay after 6 years if he takes a loan of $3500 at 5% simple interest?
(2) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 8 years.
(4) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 8 years.
(5) What amount does William have to pay after 6 years if he takes a loan of $3500 at 2% simple interest?
(6) How much loan did Matthew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7440 to clear it?
(7) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.
(8) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 6% simple interest.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.
(10) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 4% simple interest?