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) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 3 years.
(2) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?
(3) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 10% simple interest?
(4) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 7 years.
(5) Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 3 years.
(7) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?
(8) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(9) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 2% simple interest?
(10) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.