Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 4 years.
Correct Answer
$4992
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 7% × 4
= $3900 ×7/100 × 4
= 3900 × 7 × 4/100
= 27300 × 4/100
= 109200/100
= $1092
Thus, Simple Interest = $1092
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 + $1092
= $4992
Thus, Amount to be paid = $4992 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) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3900 + ($3900 × 7% × 4)
= $3900 + ($3900 ×7/100 × 4)
= $3900 + (3900 × 7 × 4/100)
= $3900 + (27300 × 4/100)
= $3900 + (109200/100)
= $3900 + $1092 = $4992
Thus, Amount (A) to be paid = $4992 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 $3900, the simple interest in 1 year
= 7/100 × 3900
= 7 × 3900/100
= 27300/100 = $273
Thus, simple interest for 1 year = $273
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $273 × 4 = $1092
Thus, Simple Interest (SI) = $1092
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $1092
= $4992
Thus, Amount to be paid = $4992 Answer
Similar Questions
(1) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(2) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.
(3) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.
(4) If Christopher paid $4480 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.
(6) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(7) If Donald paid $5400 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?
(9) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(10) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.