Question:
What amount will be due after 2 years if James borrowed a sum of $3000 at a 5% simple interest?
Correct Answer
$3300
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 5%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 2
= $3000 ×5/100 × 2
= 3000 × 5 × 2/100
= 15000 × 2/100
= 30000/100
= $300
Thus, Simple Interest = $300
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 + $300
= $3300
Thus, Amount to be paid = $3300 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) = 5%
And, Time (t) = 2 years
Thus, Amount (A)
= $3000 + ($3000 × 5% × 2)
= $3000 + ($3000 ×5/100 × 2)
= $3000 + (3000 × 5 × 2/100)
= $3000 + (15000 × 2/100)
= $3000 + (30000/100)
= $3000 + $300 = $3300
Thus, Amount (A) to be paid = $3300 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3000, the simple interest in 1 year
= 5/100 × 3000
= 5 × 3000/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $150 × 2 = $300
Thus, Simple Interest (SI) = $300
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $300
= $3300
Thus, Amount to be paid = $3300 Answer
Similar Questions
(1) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 4 years.
(2) How much loan did William borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6875 to clear it?
(3) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.
(4) Donna had to pay $5577.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) How much loan did Joshua borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8625 to clear it?
(7) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?
(8) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $10000 to clear the loan, then find the time period of the loan.
(9) If Michael paid $3828 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) How much loan did Brian borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9000 to clear it?