Question:
Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 3 years.
Correct Answer
$3488
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 3%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 3
= $3200 ×3/100 × 3
= 3200 × 3 × 3/100
= 9600 × 3/100
= 28800/100
= $288
Thus, Simple Interest = $288
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 + $288
= $3488
Thus, Amount to be paid = $3488 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) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $3200 + ($3200 × 3% × 3)
= $3200 + ($3200 ×3/100 × 3)
= $3200 + (3200 × 3 × 3/100)
= $3200 + (9600 × 3/100)
= $3200 + (28800/100)
= $3200 + $288 = $3488
Thus, Amount (A) to be paid = $3488 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3200, the simple interest in 1 year
= 3/100 × 3200
= 3 × 3200/100
= 9600/100 = $96
Thus, simple interest for 1 year = $96
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $96 × 3 = $288
Thus, Simple Interest (SI) = $288
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $288
= $3488
Thus, Amount to be paid = $3488 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(2) How much loan did Daniel borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7015 to clear it?
(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 7 years.
(4) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(6) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(7) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 8 years.
(8) Lisa had to pay $4414.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 4 years.
(10) Andrew had to pay $5520 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.