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 Elizabeth borrowed a sum of $3450 at 2% simple interest for 3 years.
(2) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.
(3) What amount does James have to pay after 6 years if he takes a loan of $3000 at 6% simple interest?
(4) Calculate the amount due if Susan borrowed a sum of $3650 at 9% simple interest for 3 years.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
(6) Donna had to pay $5577.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 7% simple interest?
(8) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(9) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?
(10) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 10% simple interest?