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) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8528 to clear the loan, then find the time period of the loan.
(2) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 3 years.
(4) How much loan did Sarah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7020 to clear it?
(5) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 3% simple interest?
(6) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.
(7) How much loan did Kevin borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8165 to clear it?
(8) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(9) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(10) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 3 years.