Question:
If James borrowed $3000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3180
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 3%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3000 × 3% × 2
= $3000 ×3/100 × 2
= 3000 × 3 × 2/100
= 9000 × 2/100
= 18000/100
= $180
Thus, Simple Interest = $180
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 = $3000 + $180
= $3180
Thus, Amount to be paid = $3180 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 = $3000
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3000 + ($3000 × 3% × 2)
= $3000 + ($3000 ×3/100 × 2)
= $3000 + (3000 × 3 × 2/100)
= $3000 + (9000 × 2/100)
= $3000 + (18000/100)
= $3000 + $180 = $3180
Thus, Amount (A) to be paid = $3180 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3000, the simple interest in 1 year
= 3/100 × 3000
= 3 × 3000/100
= 9000/100 = $90
Thus, simple interest for 1 year = $90
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $90 × 2 = $180
Thus, Simple Interest (SI) = $180
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $180
= $3180
Thus, Amount to be paid = $3180 Answer
Similar Questions
(1) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 7 years.
(2) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 3 years.
(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 9% simple interest for 7 years.
(4) If William paid $3920 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) What amount does David have to pay after 5 years if he takes a loan of $3400 at 7% simple interest?
(6) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?
(8) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 9% simple interest?
(9) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 7 years.
(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?