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) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 7 years.
(3) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
(5) If Donna paid $5432 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(7) Michelle had to pay $5692.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
(9) What amount does James have to pay after 5 years if he takes a loan of $3000 at 9% simple interest?
(10) How much loan did Betty borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7812.5 to clear it?