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) How much loan did David borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5940 to clear it?
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 7% simple interest?
(3) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 7 years.
(5) How much loan did Timothy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8880 to clear it?
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 8% simple interest for 7 years.
(7) If John paid $3456 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9231 to clear the loan, then find the time period of the loan.
(9) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 7 years.