Question:
Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 3 years.
Correct Answer
$3630
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 7%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 3
= $3000 ×7/100 × 3
= 3000 × 7 × 3/100
= 21000 × 3/100
= 63000/100
= $630
Thus, Simple Interest = $630
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 + $630
= $3630
Thus, Amount to be paid = $3630 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) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3000 + ($3000 × 7% × 3)
= $3000 + ($3000 ×7/100 × 3)
= $3000 + (3000 × 7 × 3/100)
= $3000 + (21000 × 3/100)
= $3000 + (63000/100)
= $3000 + $630 = $3630
Thus, Amount (A) to be paid = $3630 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3000, the simple interest in 1 year
= 7/100 × 3000
= 7 × 3000/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $210 × 3 = $630
Thus, Simple Interest (SI) = $630
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $630
= $3630
Thus, Amount to be paid = $3630 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 4 years.
(3) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
(5) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(6) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(7) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(9) How much loan did David borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6210 to clear it?
(10) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $7040 to clear the loan, then find the time period of the loan.