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) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7548 to clear the loan, then find the time period of the loan.
(2) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 6% simple interest?
(3) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(4) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 3% simple interest?
(5) If Ashley paid $4914 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?
(7) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(9) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 9% simple interest?
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.