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) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 4 years.
(2) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7696 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 3 years.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 4 years.
(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 10% simple interest for 7 years.
(6) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(7) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 5% simple interest?
(8) Find the amount to be paid if Patricia borrowed a sum of $5150 at 6% simple interest for 7 years.
(9) How much loan did Amanda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7865 to clear it?
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 7 years.