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) If Kenneth paid $5600 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(3) How much loan did Mark borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7680 to clear it?
(4) If Sarah paid $4466 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 8 years.
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 4 years.
(7) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 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 5% simple interest?
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
(10) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.