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) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
(2) Find the amount to be paid if David borrowed a sum of $5400 at 6% simple interest for 8 years.
(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?
(4) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(5) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
(6) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?
(7) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 7 years.
(8) How much loan did Jacob borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9600 to clear it?
(9) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.