Question:
Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 3 years.
Correct Answer
$3360
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 4%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3000 × 4% × 3
= $3000 ×4/100 × 3
= 3000 × 4 × 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 = $3000 + $360
= $3360
Thus, Amount to be paid = $3360 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 = $3000
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3000 + ($3000 × 4% × 3)
= $3000 + ($3000 ×4/100 × 3)
= $3000 + (3000 × 4 × 3/100)
= $3000 + (12000 × 3/100)
= $3000 + (36000/100)
= $3000 + $360 = $3360
Thus, Amount (A) to be paid = $3360 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3000, the simple interest in 1 year
= 4/100 × 3000
= 4 × 3000/100
= 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 = $3000 + $360
= $3360
Thus, Amount to be paid = $3360 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(2) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 3 years.
(5) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 10% simple interest?
(6) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 9% simple interest?
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 4 years.
(9) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9943 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.