Question:
Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 4 years.
Correct Answer
$4900
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 10% × 4
= $3500 ×10/100 × 4
= 3500 × 10 × 4/100
= 35000 × 4/100
= 140000/100
= $1400
Thus, Simple Interest = $1400
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 = $3500 + $1400
= $4900
Thus, Amount to be paid = $4900 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 = $3500
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3500 + ($3500 × 10% × 4)
= $3500 + ($3500 ×10/100 × 4)
= $3500 + (3500 × 10 × 4/100)
= $3500 + (35000 × 4/100)
= $3500 + (140000/100)
= $3500 + $1400 = $4900
Thus, Amount (A) to be paid = $4900 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 $3500, the simple interest in 1 year
= 10/100 × 3500
= 10 × 3500/100
= 35000/100 = $350
Thus, simple interest for 1 year = $350
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $350 × 4 = $1400
Thus, Simple Interest (SI) = $1400
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $1400
= $4900
Thus, Amount to be paid = $4900 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 4 years.
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.
(4) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7546 to clear the loan, then find the time period of the loan.
(5) If Anthony paid $4644 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 7 years.
(7) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 5% simple interest?
(9) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $8360 to clear the loan, then find the time period of the loan.
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?