Question:
Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 3 years.
Correct Answer
$4360
Solution And Explanation
Solution
Given,
Principal (P) = $4000
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) = $4000 × 3% × 3
= $4000 ×3/100 × 3
= 4000 × 3 × 3/100
= 12000 × 3/100
= 36000/100
= $360
Thus, Simple Interest = $360
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 = $4000 + $360
= $4360
Thus, Amount to be paid = $4360 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 = $4000
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $4000 + ($4000 × 3% × 3)
= $4000 + ($4000 ×3/100 × 3)
= $4000 + (4000 × 3 × 3/100)
= $4000 + (12000 × 3/100)
= $4000 + (36000/100)
= $4000 + $360 = $4360
Thus, Amount (A) to be paid = $4360 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 $4000, the simple interest in 1 year
= 3/100 × 4000
= 3 × 4000/100
= 12000/100 = $120
Thus, simple interest for 1 year = $120
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $120 × 3 = $360
Thus, Simple Interest (SI) = $360
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $360
= $4360
Thus, Amount to be paid = $4360 Answer
Similar Questions
(1) How much loan did Sandra borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7740 to clear it?
(2) In how much time a principal of $3200 will amount to $4000 at a simple interest of 5% per annum?
(3) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.
(4) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 7% simple interest.
(5) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(6) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(8) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 9% simple interest?
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 3 years.
(10) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.