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) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 6% simple interest?
(3) If Steven paid $5520 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) If Joseph paid $3996 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 2% simple interest?
(6) If Barbara paid $3834 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(8) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 10% simple interest?
(9) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 3 years.