Question:
Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 3 years.
Correct Answer
$3815
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 3% × 3
= $3500 ×3/100 × 3
= 3500 × 3 × 3/100
= 10500 × 3/100
= 31500/100
= $315
Thus, Simple Interest = $315
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 = $3500 + $315
= $3815
Thus, Amount to be paid = $3815 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 = $3500
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $3500 + ($3500 × 3% × 3)
= $3500 + ($3500 ×3/100 × 3)
= $3500 + (3500 × 3 × 3/100)
= $3500 + (10500 × 3/100)
= $3500 + (31500/100)
= $3500 + $315 = $3815
Thus, Amount (A) to be paid = $3815 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 $3500, the simple interest in 1 year
= 3/100 × 3500
= 3 × 3500/100
= 10500/100 = $105
Thus, simple interest for 1 year = $105
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $105 × 3 = $315
Thus, Simple Interest (SI) = $315
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $315
= $3815
Thus, Amount to be paid = $3815 Answer
Similar Questions
(1) Ashley had to pay $4959.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 3 years.
(3) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(4) How much loan did Kevin borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8875 to clear it?
(5) How much loan did David borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6210 to clear it?
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 7 years.
(7) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(8) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(9) What amount does James have to pay after 5 years if he takes a loan of $3000 at 9% simple interest?
(10) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?