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) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.
(3) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(4) 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.
(5) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.
(6) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 10% simple interest?
(7) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.
(8) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?
(9) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 5% simple interest?
(10) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.