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) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 4% simple interest?
(3) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does John have to pay after 6 years if he takes a loan of $3200 at 8% simple interest?
(5) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 4 years.
(7) What amount will be due after 2 years if William borrowed a sum of $3250 at a 9% simple interest?
(8) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?
(9) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 4 years.