Question:
Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 3 years.
Correct Answer
$3924
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 3% × 3
= $3600 ×3/100 × 3
= 3600 × 3 × 3/100
= 10800 × 3/100
= 32400/100
= $324
Thus, Simple Interest = $324
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 = $3600 + $324
= $3924
Thus, Amount to be paid = $3924 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 = $3600
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $3600 + ($3600 × 3% × 3)
= $3600 + ($3600 ×3/100 × 3)
= $3600 + (3600 × 3 × 3/100)
= $3600 + (10800 × 3/100)
= $3600 + (32400/100)
= $3600 + $324 = $3924
Thus, Amount (A) to be paid = $3924 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 $3600, the simple interest in 1 year
= 3/100 × 3600
= 3 × 3600/100
= 10800/100 = $108
Thus, simple interest for 1 year = $108
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $108 × 3 = $324
Thus, Simple Interest (SI) = $324
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $324
= $3924
Thus, Amount to be paid = $3924 Answer
Similar Questions
(1) What amount will be due after 2 years if William borrowed a sum of $3250 at a 5% simple interest?
(2) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 8 years.
(4) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 10% simple interest?
(5) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
(6) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.
(7) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.
(8) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 8 years.
(9) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(10) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?