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) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(2) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 4 years.
(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(4) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 4 years.
(5) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(6) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) If William borrowed $3500 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) How much loan did Laura borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9027.5 to clear it?
(9) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.