Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 4 years.
Correct Answer
$5304
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 9% × 4
= $3900 ×9/100 × 4
= 3900 × 9 × 4/100
= 35100 × 4/100
= 140400/100
= $1404
Thus, Simple Interest = $1404
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 = $3900 + $1404
= $5304
Thus, Amount to be paid = $5304 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 = $3900
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3900 + ($3900 × 9% × 4)
= $3900 + ($3900 ×9/100 × 4)
= $3900 + (3900 × 9 × 4/100)
= $3900 + (35100 × 4/100)
= $3900 + (140400/100)
= $3900 + $1404 = $5304
Thus, Amount (A) to be paid = $5304 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 $3900, the simple interest in 1 year
= 9/100 × 3900
= 9 × 3900/100
= 35100/100 = $351
Thus, simple interest for 1 year = $351
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $351 × 4 = $1404
Thus, Simple Interest (SI) = $1404
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $1404
= $5304
Thus, Amount to be paid = $5304 Answer
Similar Questions
(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 7 years.
(2) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
(4) 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.
(5) If Michael borrowed $3300 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 5% simple interest?
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 7 years.
(8) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(9) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(10) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.