Question:
Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 4 years.
Correct Answer
$4760
Solution And Explanation
Solution
Given,
Principal (P) = $3400
Rate of Simple Interest (SI) = 10%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $3400 × 10% × 4
= $3400 ×10/100 × 4
= 3400 × 10 × 4/100
= 34000 × 4/100
= 136000/100
= $1360
Thus, Simple Interest = $1360
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 = $3400 + $1360
= $4760
Thus, Amount to be paid = $4760 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 = $3400
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3400 + ($3400 × 10% × 4)
= $3400 + ($3400 ×10/100 × 4)
= $3400 + (3400 × 10 × 4/100)
= $3400 + (34000 × 4/100)
= $3400 + (136000/100)
= $3400 + $1360 = $4760
Thus, Amount (A) to be paid = $4760 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3400, the simple interest in 1 year
= 10/100 × 3400
= 10 × 3400/100
= 34000/100 = $340
Thus, simple interest for 1 year = $340
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $340 × 4 = $1360
Thus, Simple Interest (SI) = $1360
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $1360
= $4760
Thus, Amount to be paid = $4760 Answer
Similar Questions
(1) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 3% simple interest?
(3) How much loan did Kevin borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8875 to clear it?
(4) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(5) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.
(6) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(7) If Christopher paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 3% simple interest?
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 8 years.