Question:
Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.
Correct Answer
$3392
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 2% × 3
= $3200 ×2/100 × 3
= 3200 × 2 × 3/100
= 6400 × 3/100
= 19200/100
= $192
Thus, Simple Interest = $192
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 = $3200 + $192
= $3392
Thus, Amount to be paid = $3392 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 = $3200
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3200 + ($3200 × 2% × 3)
= $3200 + ($3200 ×2/100 × 3)
= $3200 + (3200 × 2 × 3/100)
= $3200 + (6400 × 3/100)
= $3200 + (19200/100)
= $3200 + $192 = $3392
Thus, Amount (A) to be paid = $3392 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 $3200, the simple interest in 1 year
= 2/100 × 3200
= 2 × 3200/100
= 6400/100 = $64
Thus, simple interest for 1 year = $64
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $64 × 3 = $192
Thus, Simple Interest (SI) = $192
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $192
= $3392
Thus, Amount to be paid = $3392 Answer
Similar Questions
(1) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 4% simple interest.
(2) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8050 to clear it?
(3) David had to pay $3706 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.
(5) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 10% simple interest?
(7) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.
(8) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(9) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(10) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 4% simple interest?