Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 4 years.
Correct Answer
$4526
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 6% × 4
= $3650 ×6/100 × 4
= 3650 × 6 × 4/100
= 21900 × 4/100
= 87600/100
= $876
Thus, Simple Interest = $876
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 = $3650 + $876
= $4526
Thus, Amount to be paid = $4526 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 = $3650
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3650 + ($3650 × 6% × 4)
= $3650 + ($3650 ×6/100 × 4)
= $3650 + (3650 × 6 × 4/100)
= $3650 + (21900 × 4/100)
= $3650 + (87600/100)
= $3650 + $876 = $4526
Thus, Amount (A) to be paid = $4526 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 $3650, the simple interest in 1 year
= 6/100 × 3650
= 6 × 3650/100
= 21900/100 = $219
Thus, simple interest for 1 year = $219
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $219 × 4 = $876
Thus, Simple Interest (SI) = $876
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $876
= $4526
Thus, Amount to be paid = $4526 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 $8800 to clear the loan, then find the time period of the loan.
(2) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 10% simple interest?
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?
(5) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 8 years.
(7) How much loan did Patricia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6180 to clear it?
(8) How much loan did Mark borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8000 to clear it?
(9) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
(10) In how much time a principal of $3050 will amount to $3416 at a simple interest of 4% per annum?