Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 4 years.
Correct Answer
$4896
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 9% × 4
= $3600 ×9/100 × 4
= 3600 × 9 × 4/100
= 32400 × 4/100
= 129600/100
= $1296
Thus, Simple Interest = $1296
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 + $1296
= $4896
Thus, Amount to be paid = $4896 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) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 9% × 4)
= $3600 + ($3600 ×9/100 × 4)
= $3600 + (3600 × 9 × 4/100)
= $3600 + (32400 × 4/100)
= $3600 + (129600/100)
= $3600 + $1296 = $4896
Thus, Amount (A) to be paid = $4896 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 $3600, the simple interest in 1 year
= 9/100 × 3600
= 9 × 3600/100
= 32400/100 = $324
Thus, simple interest for 1 year = $324
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $324 × 4 = $1296
Thus, Simple Interest (SI) = $1296
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1296
= $4896
Thus, Amount to be paid = $4896 Answer
Similar Questions
(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
(2) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 2% simple interest?
(3) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(6) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 3% simple interest for 8 years.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 6% simple interest for 8 years.
(9) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(10) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 9% simple interest?