Question:
What amount will be due after 2 years if James borrowed a sum of $3000 at a 10% simple interest?
Correct Answer
$3600
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 10%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 2
= $3000 ×10/100 × 2
= 3000 × 10 × 2/100
= 30000 × 2/100
= 60000/100
= $600
Thus, Simple Interest = $600
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 + $600
= $3600
Thus, Amount to be paid = $3600 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) = 10%
And, Time (t) = 2 years
Thus, Amount (A)
= $3000 + ($3000 × 10% × 2)
= $3000 + ($3000 ×10/100 × 2)
= $3000 + (3000 × 10 × 2/100)
= $3000 + (30000 × 2/100)
= $3000 + (60000/100)
= $3000 + $600 = $3600
Thus, Amount (A) to be paid = $3600 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3000, the simple interest in 1 year
= 10/100 × 3000
= 10 × 3000/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $300 × 2 = $600
Thus, Simple Interest (SI) = $600
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $600
= $3600
Thus, Amount to be paid = $3600 Answer
Similar Questions
(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.
(3) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 4 years.
(5) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 4 years.
(6) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 4 years.
(7) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(8) Nancy had to pay $4523.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
(10) Barbara had to pay $3869.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.