Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 4 years.
Correct Answer
$4608
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 7% × 4
= $3600 ×7/100 × 4
= 3600 × 7 × 4/100
= 25200 × 4/100
= 100800/100
= $1008
Thus, Simple Interest = $1008
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 = $3600 + $1008
= $4608
Thus, Amount to be paid = $4608 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 = $3600
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 7% × 4)
= $3600 + ($3600 ×7/100 × 4)
= $3600 + (3600 × 7 × 4/100)
= $3600 + (25200 × 4/100)
= $3600 + (100800/100)
= $3600 + $1008 = $4608
Thus, Amount (A) to be paid = $4608 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 $3600, the simple interest in 1 year
= 7/100 × 3600
= 7 × 3600/100
= 25200/100 = $252
Thus, simple interest for 1 year = $252
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $252 × 4 = $1008
Thus, Simple Interest (SI) = $1008
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1008
= $4608
Thus, Amount to be paid = $4608 Answer
Similar Questions
(1) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.
(3) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 9% simple interest?
(4) If Barbara paid $4118 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 4 years.
(6) John had to pay $3680 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 3% simple interest?
(8) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(10) In how much time a principal of $3200 will amount to $3392 at a simple interest of 2% per annum?