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) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 4 years.
(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 4 years.
(3) What amount does David have to pay after 5 years if he takes a loan of $3400 at 5% simple interest?
(4) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 4 years.
(5) If Mary paid $3294 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $13300 to clear the loan, then find the time period of the loan.
(7) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(8) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?
(9) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 6% simple interest?
(10) If Michael paid $3696 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.