Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 10% simple interest for 4 years.
Correct Answer
$5040
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 10% × 4
= $3600 ×10/100 × 4
= 3600 × 10 × 4/100
= 36000 × 4/100
= 144000/100
= $1440
Thus, Simple Interest = $1440
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 = $3600 + $1440
= $5040
Thus, Amount to be paid = $5040 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 = $3600
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3600 + ($3600 × 10% × 4)
= $3600 + ($3600 ×10/100 × 4)
= $3600 + (3600 × 10 × 4/100)
= $3600 + (36000 × 4/100)
= $3600 + (144000/100)
= $3600 + $1440 = $5040
Thus, Amount (A) to be paid = $5040 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 $3600, the simple interest in 1 year
= 10/100 × 3600
= 10 × 3600/100
= 36000/100 = $360
Thus, simple interest for 1 year = $360
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $360 × 4 = $1440
Thus, Simple Interest (SI) = $1440
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1440
= $5040
Thus, Amount to be paid = $5040 Answer
Similar Questions
(1) In how much time a principal of $3200 will amount to $3328 at a simple interest of 2% per annum?
(2) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 8 years.
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 8 years.
(4) How much loan did Christopher borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6600 to clear it?
(5) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?
(6) What amount will be due after 2 years if James borrowed a sum of $3000 at a 10% simple interest?
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 7 years.
(8) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(9) How much loan did Thomas borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6960 to clear it?
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 7% simple interest?