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) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 8 years.
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 5% simple interest?
(3) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) How much loan did Sarah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7312.5 to clear it?
(5) 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.
(6) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.
(8) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 4 years.
(9) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 4 years.
(10) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6037.5 to clear it?