Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 4 years.
Correct Answer
$5320
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 10% × 4
= $3800 ×10/100 × 4
= 3800 × 10 × 4/100
= 38000 × 4/100
= 152000/100
= $1520
Thus, Simple Interest = $1520
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 = $3800 + $1520
= $5320
Thus, Amount to be paid = $5320 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 = $3800
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3800 + ($3800 × 10% × 4)
= $3800 + ($3800 ×10/100 × 4)
= $3800 + (3800 × 10 × 4/100)
= $3800 + (38000 × 4/100)
= $3800 + (152000/100)
= $3800 + $1520 = $5320
Thus, Amount (A) to be paid = $5320 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 $3800, the simple interest in 1 year
= 10/100 × 3800
= 10 × 3800/100
= 38000/100 = $380
Thus, simple interest for 1 year = $380
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $380 × 4 = $1520
Thus, Simple Interest (SI) = $1520
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1520
= $5320
Thus, Amount to be paid = $5320 Answer
Similar Questions
(1) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 3 years.
(2) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.
(3) How much loan did Amanda borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8937.5 to clear it?
(4) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 8 years.
(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 4 years.
(6) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9940 to clear the loan, then find the time period of the loan.
(8) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 2% simple interest?
(9) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $10920 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.