Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 4 years.
Correct Answer
$4836
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 6% × 4
= $3900 ×6/100 × 4
= 3900 × 6 × 4/100
= 23400 × 4/100
= 93600/100
= $936
Thus, Simple Interest = $936
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 = $3900 + $936
= $4836
Thus, Amount to be paid = $4836 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 = $3900
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3900 + ($3900 × 6% × 4)
= $3900 + ($3900 ×6/100 × 4)
= $3900 + (3900 × 6 × 4/100)
= $3900 + (23400 × 4/100)
= $3900 + (93600/100)
= $3900 + $936 = $4836
Thus, Amount (A) to be paid = $4836 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 $3900, the simple interest in 1 year
= 6/100 × 3900
= 6 × 3900/100
= 23400/100 = $234
Thus, simple interest for 1 year = $234
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $234 × 4 = $936
Thus, Simple Interest (SI) = $936
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $936
= $4836
Thus, Amount to be paid = $4836 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(2) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11946 to clear the loan, then find the time period of the loan.
(3) If David paid $4080 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 if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.
(5) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(6) How much loan did David borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5940 to clear it?
(7) If Anthony paid $5160 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 3 years.
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 7% simple interest for 7 years.
(10) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 3 years.