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) What amount does James have to pay after 6 years if he takes a loan of $3000 at 4% simple interest?
(2) What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 9% simple interest?
(4) What amount will be due after 2 years if James borrowed a sum of $3000 at a 9% simple interest?
(5) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 4 years.
(7) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 8 years.
(9) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 9% simple interest?
(10) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 5% simple interest?