Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.
Correct Answer
$5148
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 8% × 4
= $3900 ×8/100 × 4
= 3900 × 8 × 4/100
= 31200 × 4/100
= 124800/100
= $1248
Thus, Simple Interest = $1248
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 + $1248
= $5148
Thus, Amount to be paid = $5148 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) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3900 + ($3900 × 8% × 4)
= $3900 + ($3900 ×8/100 × 4)
= $3900 + (3900 × 8 × 4/100)
= $3900 + (31200 × 4/100)
= $3900 + (124800/100)
= $3900 + $1248 = $5148
Thus, Amount (A) to be paid = $5148 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 $3900, the simple interest in 1 year
= 8/100 × 3900
= 8 × 3900/100
= 31200/100 = $312
Thus, simple interest for 1 year = $312
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $312 × 4 = $1248
Thus, Simple Interest (SI) = $1248
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $1248
= $5148
Thus, Amount to be paid = $5148 Answer
Similar Questions
(1) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9512 to clear the loan, then find the time period of the loan.
(2) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 6% simple interest?
(3) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?
(4) Joseph had to pay $4144 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(7) How much loan did David borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6750 to clear it?
(8) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?
(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 7 years.
(10) Mary had to pay $3507.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.