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) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 4 years.
(3) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 3% simple interest?
(4) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(5) What amount does James have to pay after 5 years if he takes a loan of $3000 at 9% simple interest?
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 8 years.
(7) How much loan did Mark borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8000 to clear it?
(8) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $7696 to clear the loan, then find the time period of the loan.
(9) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.
(10) How much loan did Sharon borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8912.5 to clear it?