Question:
Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 3 years.
Correct Answer
$3450
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 5%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 3
= $3000 ×5/100 × 3
= 3000 × 5 × 3/100
= 15000 × 3/100
= 45000/100
= $450
Thus, Simple Interest = $450
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 + $450
= $3450
Thus, Amount to be paid = $3450 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) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3000 + ($3000 × 5% × 3)
= $3000 + ($3000 ×5/100 × 3)
= $3000 + (3000 × 5 × 3/100)
= $3000 + (15000 × 3/100)
= $3000 + (45000/100)
= $3000 + $450 = $3450
Thus, Amount (A) to be paid = $3450 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3000, the simple interest in 1 year
= 5/100 × 3000
= 5 × 3000/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $150 × 3 = $450
Thus, Simple Interest (SI) = $450
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $450
= $3450
Thus, Amount to be paid = $3450 Answer
Similar Questions
(1) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 8 years.
(2) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 8 years.
(3) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 2% simple interest?
(4) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7708 to clear the loan, then find the time period of the loan.
(5) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 3 years.
(7) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan.
(8) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 4 years.
(10) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.