Question:
What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?
Correct Answer
$3480
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 8%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 2
= $3000 ×8/100 × 2
= 3000 × 8 × 2/100
= 24000 × 2/100
= 48000/100
= $480
Thus, Simple Interest = $480
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 + $480
= $3480
Thus, Amount to be paid = $3480 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) = 8%
And, Time (t) = 2 years
Thus, Amount (A)
= $3000 + ($3000 × 8% × 2)
= $3000 + ($3000 ×8/100 × 2)
= $3000 + (3000 × 8 × 2/100)
= $3000 + (24000 × 2/100)
= $3000 + (48000/100)
= $3000 + $480 = $3480
Thus, Amount (A) to be paid = $3480 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3000, the simple interest in 1 year
= 8/100 × 3000
= 8 × 3000/100
= 24000/100 = $240
Thus, simple interest for 1 year = $240
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $240 × 2 = $480
Thus, Simple Interest (SI) = $480
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $480
= $3480
Thus, Amount to be paid = $3480 Answer
Similar Questions
(1) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(2) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 7 years.
(4) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(5) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8970 to clear it?
(6) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7252 to clear the loan, then find the time period of the loan.
(7) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(8) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(9) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(10) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.