Question:
Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 3 years.
Correct Answer
$3978.5
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 3% × 3
= $3650 ×3/100 × 3
= 3650 × 3 × 3/100
= 10950 × 3/100
= 32850/100
= $328.5
Thus, Simple Interest = $328.5
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 = $3650 + $328.5
= $3978.5
Thus, Amount to be paid = $3978.5 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 = $3650
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $3650 + ($3650 × 3% × 3)
= $3650 + ($3650 ×3/100 × 3)
= $3650 + (3650 × 3 × 3/100)
= $3650 + (10950 × 3/100)
= $3650 + (32850/100)
= $3650 + $328.5 = $3978.5
Thus, Amount (A) to be paid = $3978.5 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 $3650, the simple interest in 1 year
= 3/100 × 3650
= 3 × 3650/100
= 10950/100 = $109.5
Thus, simple interest for 1 year = $109.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $109.5 × 3 = $328.5
Thus, Simple Interest (SI) = $328.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $328.5
= $3978.5
Thus, Amount to be paid = $3978.5 Answer
Similar Questions
(1) James had to pay $3360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(4) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 9% simple interest.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 7 years.
(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 7 years.
(8) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.
(10) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 2% simple interest.