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 2% simple interest for 8 years.
(2) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
(3) Charles had to pay $4485 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 6% simple interest.
(5) How much loan did Amanda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8222.5 to clear it?
(6) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 4 years.
(7) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
(9) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 4 years.
(10) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10600 to clear the loan, then find the time period of the loan.