Question:
Calculate the amount due if William borrowed a sum of $3500 at 9% simple interest for 4 years.
Correct Answer
$4760
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 9% × 4
= $3500 ×9/100 × 4
= 3500 × 9 × 4/100
= 31500 × 4/100
= 126000/100
= $1260
Thus, Simple Interest = $1260
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 = $3500 + $1260
= $4760
Thus, Amount to be paid = $4760 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 = $3500
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3500 + ($3500 × 9% × 4)
= $3500 + ($3500 ×9/100 × 4)
= $3500 + (3500 × 9 × 4/100)
= $3500 + (31500 × 4/100)
= $3500 + (126000/100)
= $3500 + $1260 = $4760
Thus, Amount (A) to be paid = $4760 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 $3500, the simple interest in 1 year
= 9/100 × 3500
= 9 × 3500/100
= 31500/100 = $315
Thus, simple interest for 1 year = $315
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $315 × 4 = $1260
Thus, Simple Interest (SI) = $1260
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $1260
= $4760
Thus, Amount to be paid = $4760 Answer
Similar Questions
(1) Find the amount to be paid if Linda borrowed a sum of $5350 at 10% simple interest for 7 years.
(2) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 7 years.
(3) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?
(4) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 8 years.
(6) In how much time a principal of $3100 will amount to $3875 at a simple interest of 5% per annum?
(7) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(8) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 6% simple interest?
(10) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 5% simple interest.