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) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7602 to clear the loan, then find the time period of the loan.
(2) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(3) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(4) How much loan did Amanda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7865 to clear it?
(5) Calculate the amount due if Patricia borrowed a sum of $3150 at 10% simple interest for 3 years.
(6) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 3 years.
(7) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.
(9) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(10) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.