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) Robert had to pay $3379 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 8% simple interest?
(3) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(4) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7748 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 4 years.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 8 years.
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
(9) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(10) How much loan did George borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8030 to clear it?