Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 4 years.
Correct Answer
$5168
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 9% × 4
= $3800 ×9/100 × 4
= 3800 × 9 × 4/100
= 34200 × 4/100
= 136800/100
= $1368
Thus, Simple Interest = $1368
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 = $3800 + $1368
= $5168
Thus, Amount to be paid = $5168 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 = $3800
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3800 + ($3800 × 9% × 4)
= $3800 + ($3800 ×9/100 × 4)
= $3800 + (3800 × 9 × 4/100)
= $3800 + (34200 × 4/100)
= $3800 + (136800/100)
= $3800 + $1368 = $5168
Thus, Amount (A) to be paid = $5168 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 $3800, the simple interest in 1 year
= 9/100 × 3800
= 9 × 3800/100
= 34200/100 = $342
Thus, simple interest for 1 year = $342
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $342 × 4 = $1368
Thus, Simple Interest (SI) = $1368
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1368
= $5168
Thus, Amount to be paid = $5168 Answer
Similar Questions
(1) How much loan did Margaret borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6985 to clear it?
(2) If Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) How much loan did Charles borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6785 to clear it?
(4) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(6) How much loan did William borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6600 to clear it?
(7) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?
(8) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 8% simple interest?
(9) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.
(10) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?