Question:
Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 3 years.
Correct Answer
$3872
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 7% × 3
= $3200 ×7/100 × 3
= 3200 × 7 × 3/100
= 22400 × 3/100
= 67200/100
= $672
Thus, Simple Interest = $672
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 + $672
= $3872
Thus, Amount to be paid = $3872 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) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3200 + ($3200 × 7% × 3)
= $3200 + ($3200 ×7/100 × 3)
= $3200 + (3200 × 7 × 3/100)
= $3200 + (22400 × 3/100)
= $3200 + (67200/100)
= $3200 + $672 = $3872
Thus, Amount (A) to be paid = $3872 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 $3200, the simple interest in 1 year
= 7/100 × 3200
= 7 × 3200/100
= 22400/100 = $224
Thus, simple interest for 1 year = $224
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $224 × 3 = $672
Thus, Simple Interest (SI) = $672
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $672
= $3872
Thus, Amount to be paid = $3872 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(2) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(3) Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 3 years.
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 9% simple interest?
(5) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 10% simple interest.
(6) In how much time a principal of $3100 will amount to $3348 at a simple interest of 2% per annum?
(7) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 7 years.
(8) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 4 years.
(9) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 5% simple interest?
(10) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.