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 after 10 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.
(2) If Anthony paid $4816 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 10% simple interest?
(4) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 8 years.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 4 years.
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 4 years.
(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 7% simple interest?
(8) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.
(9) If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 5% simple interest?