Question:
Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 4 years.
Correct Answer
$4480
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 7%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3500 × 7% × 4
= $3500 ×7/100 × 4
= 3500 × 7 × 4/100
= 24500 × 4/100
= 98000/100
= $980
Thus, Simple Interest = $980
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 = $3500 + $980
= $4480
Thus, Amount to be paid = $4480 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 = $3500
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3500 + ($3500 × 7% × 4)
= $3500 + ($3500 ×7/100 × 4)
= $3500 + (3500 × 7 × 4/100)
= $3500 + (24500 × 4/100)
= $3500 + (98000/100)
= $3500 + $980 = $4480
Thus, Amount (A) to be paid = $4480 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3500, the simple interest in 1 year
= 7/100 × 3500
= 7 × 3500/100
= 24500/100 = $245
Thus, simple interest for 1 year = $245
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $245 × 4 = $980
Thus, Simple Interest (SI) = $980
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $980
= $4480
Thus, Amount to be paid = $4480 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 4 years.
(2) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 3 years.
(4) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 8 years.
(6) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 7% simple interest.
(7) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(10) In how much time a principal of $3000 will amount to $3600 at a simple interest of 4% per annum?