Question:
Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 4 years.
Correct Answer
$5460
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 10% × 4
= $3900 ×10/100 × 4
= 3900 × 10 × 4/100
= 39000 × 4/100
= 156000/100
= $1560
Thus, Simple Interest = $1560
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 = $3900 + $1560
= $5460
Thus, Amount to be paid = $5460 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 = $3900
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3900 + ($3900 × 10% × 4)
= $3900 + ($3900 ×10/100 × 4)
= $3900 + (3900 × 10 × 4/100)
= $3900 + (39000 × 4/100)
= $3900 + (156000/100)
= $3900 + $1560 = $5460
Thus, Amount (A) to be paid = $5460 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 $3900, the simple interest in 1 year
= 10/100 × 3900
= 10 × 3900/100
= 39000/100 = $390
Thus, simple interest for 1 year = $390
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $390 × 4 = $1560
Thus, Simple Interest (SI) = $1560
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $1560
= $5460
Thus, Amount to be paid = $5460 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 4 years.
(2) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 7% simple interest.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 8 years.
(5) How much loan did Laura borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9420 to clear it?
(6) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.
(7) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 7 years.
(9) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?
(10) If Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.