Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 4 years.
Correct Answer
$4712
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 6% × 4
= $3800 ×6/100 × 4
= 3800 × 6 × 4/100
= 22800 × 4/100
= 91200/100
= $912
Thus, Simple Interest = $912
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 = $3800 + $912
= $4712
Thus, Amount to be paid = $4712 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 = $3800
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3800 + ($3800 × 6% × 4)
= $3800 + ($3800 ×6/100 × 4)
= $3800 + (3800 × 6 × 4/100)
= $3800 + (22800 × 4/100)
= $3800 + (91200/100)
= $3800 + $912 = $4712
Thus, Amount (A) to be paid = $4712 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 $3800, the simple interest in 1 year
= 6/100 × 3800
= 6 × 3800/100
= 22800/100 = $228
Thus, simple interest for 1 year = $228
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $228 × 4 = $912
Thus, Simple Interest (SI) = $912
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $912
= $4712
Thus, Amount to be paid = $4712 Answer
Similar Questions
(1) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.
(2) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(3) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.
(5) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8797.5 to clear it?
(6) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 3 years.
(7) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 10% simple interest?
(8) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 5% simple interest?
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(10) Robert had to pay $3379 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.