Question:
Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 3 years.
Correct Answer
$3910
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 5% × 3
= $3400 ×5/100 × 3
= 3400 × 5 × 3/100
= 17000 × 3/100
= 51000/100
= $510
Thus, Simple Interest = $510
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 = $3400 + $510
= $3910
Thus, Amount to be paid = $3910 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 = $3400
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3400 + ($3400 × 5% × 3)
= $3400 + ($3400 ×5/100 × 3)
= $3400 + (3400 × 5 × 3/100)
= $3400 + (17000 × 3/100)
= $3400 + (51000/100)
= $3400 + $510 = $3910
Thus, Amount (A) to be paid = $3910 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 $3400, the simple interest in 1 year
= 5/100 × 3400
= 5 × 3400/100
= 17000/100 = $170
Thus, simple interest for 1 year = $170
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $170 × 3 = $510
Thus, Simple Interest (SI) = $510
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $510
= $3910
Thus, Amount to be paid = $3910 Answer
Similar Questions
(1) What amount does James have to pay after 6 years if he takes a loan of $3000 at 5% simple interest?
(2) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.
(3) If Donald paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 7 years.
(5) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6540 to clear it?
(6) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 7 years.
(8) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(9) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 2% simple interest?
(10) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $8976 to clear the loan, then find the time period of the loan.