Question:
Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.
Correct Answer
$3680
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 5% × 3
= $3200 ×5/100 × 3
= 3200 × 5 × 3/100
= 16000 × 3/100
= 48000/100
= $480
Thus, Simple Interest = $480
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 = $3200 + $480
= $3680
Thus, Amount to be paid = $3680 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 = $3200
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3200 + ($3200 × 5% × 3)
= $3200 + ($3200 ×5/100 × 3)
= $3200 + (3200 × 5 × 3/100)
= $3200 + (16000 × 3/100)
= $3200 + (48000/100)
= $3200 + $480 = $3680
Thus, Amount (A) to be paid = $3680 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 $3200, the simple interest in 1 year
= 5/100 × 3200
= 5 × 3200/100
= 16000/100 = $160
Thus, simple interest for 1 year = $160
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $160 × 3 = $480
Thus, Simple Interest (SI) = $480
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $480
= $3680
Thus, Amount to be paid = $3680 Answer
Similar Questions
(1) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
(2) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 6% simple interest?
(3) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 8 years.
(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 3 years.
(6) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 7% simple interest?
(7) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(8) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $11765 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 7 years.
(10) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 6% simple interest?