Question:
Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
Correct Answer
$4216
Solution And Explanation
Solution
Given,
Principal (P) = $3100
Rate of Simple Interest (SI) = 9%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3100 × 9% × 4
= $3100 ×9/100 × 4
= 3100 × 9 × 4/100
= 27900 × 4/100
= 111600/100
= $1116
Thus, Simple Interest = $1116
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 = $3100 + $1116
= $4216
Thus, Amount to be paid = $4216 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 = $3100
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3100 + ($3100 × 9% × 4)
= $3100 + ($3100 ×9/100 × 4)
= $3100 + (3100 × 9 × 4/100)
= $3100 + (27900 × 4/100)
= $3100 + (111600/100)
= $3100 + $1116 = $4216
Thus, Amount (A) to be paid = $4216 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3100, the simple interest in 1 year
= 9/100 × 3100
= 9 × 3100/100
= 27900/100 = $279
Thus, simple interest for 1 year = $279
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $279 × 4 = $1116
Thus, Simple Interest (SI) = $1116
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $1116
= $4216
Thus, Amount to be paid = $4216 Answer
Similar Questions
(1) If Linda borrowed $3350 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.
(3) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(4) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7748 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 8 years.
(6) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 7 years.
(8) Susan had to pay $3978.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(10) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $12200 to clear the loan, then find the time period of the loan.