Question:
Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 3 years.
Correct Answer
$3180
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 2%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 3
= $3000 ×2/100 × 3
= 3000 × 2 × 3/100
= 6000 × 3/100
= 18000/100
= $180
Thus, Simple Interest = $180
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 + $180
= $3180
Thus, Amount to be paid = $3180 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) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3000 + ($3000 × 2% × 3)
= $3000 + ($3000 ×2/100 × 3)
= $3000 + (3000 × 2 × 3/100)
= $3000 + (6000 × 3/100)
= $3000 + (18000/100)
= $3000 + $180 = $3180
Thus, Amount (A) to be paid = $3180 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3000, the simple interest in 1 year
= 2/100 × 3000
= 2 × 3000/100
= 6000/100 = $60
Thus, simple interest for 1 year = $60
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $60 × 3 = $180
Thus, Simple Interest (SI) = $180
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $180
= $3180
Thus, Amount to be paid = $3180 Answer
Similar Questions
(1) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
(2) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 8 years.
(4) If Joseph borrowed $3700 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) If Patricia borrowed $3150 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 8% simple interest?
(8) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $12000 to clear the loan, then find the time period of the loan.
(10) If Patricia paid $3654 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.