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) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(2) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 7% simple interest?
(3) In how much time a principal of $3050 will amount to $3812.5 at a simple interest of 5% per annum?
(4) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.
(5) In how much time a principal of $3000 will amount to $3180 at a simple interest of 3% per annum?
(6) In how much time a principal of $3050 will amount to $3233 at a simple interest of 2% per annum?
(7) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 2% simple interest?
(9) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 6% simple interest?
(10) How much loan did Daniel borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6710 to clear it?