Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 8% simple interest for 4 years.
Correct Answer
$4752
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 8%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 4
= $3600 ×8/100 × 4
= 3600 × 8 × 4/100
= 28800 × 4/100
= 115200/100
= $1152
Thus, Simple Interest = $1152
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 + $1152
= $4752
Thus, Amount to be paid = $4752 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) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 8% × 4)
= $3600 + ($3600 ×8/100 × 4)
= $3600 + (3600 × 8 × 4/100)
= $3600 + (28800 × 4/100)
= $3600 + (115200/100)
= $3600 + $1152 = $4752
Thus, Amount (A) to be paid = $4752 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3600, the simple interest in 1 year
= 8/100 × 3600
= 8 × 3600/100
= 28800/100 = $288
Thus, simple interest for 1 year = $288
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $288 × 4 = $1152
Thus, Simple Interest (SI) = $1152
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1152
= $4752
Thus, Amount to be paid = $4752 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 7 years.
(2) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 3 years.
(3) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 9% simple interest for 7 years.
(6) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8094 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(8) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(9) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 7 years.