Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.
Correct Answer
$4864
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 7% × 4
= $3800 ×7/100 × 4
= 3800 × 7 × 4/100
= 26600 × 4/100
= 106400/100
= $1064
Thus, Simple Interest = $1064
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 + $1064
= $4864
Thus, Amount to be paid = $4864 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) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3800 + ($3800 × 7% × 4)
= $3800 + ($3800 ×7/100 × 4)
= $3800 + (3800 × 7 × 4/100)
= $3800 + (26600 × 4/100)
= $3800 + (106400/100)
= $3800 + $1064 = $4864
Thus, Amount (A) to be paid = $4864 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 $3800, the simple interest in 1 year
= 7/100 × 3800
= 7 × 3800/100
= 26600/100 = $266
Thus, simple interest for 1 year = $266
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $266 × 4 = $1064
Thus, Simple Interest (SI) = $1064
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1064
= $4864
Thus, Amount to be paid = $4864 Answer
Similar Questions
(1) Emily had to pay $5035 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(3) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(4) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 8 years.
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 8 years.
(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 8% simple interest?
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.
(9) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 6% simple interest.
(10) What amount will be due after 2 years if James borrowed a sum of $3000 at a 10% simple interest?