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) If Thomas borrowed $3800 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 4 years.
(3) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 4 years.
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?
(6) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
(7) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(8) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?
(9) If Donald paid $5400 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.