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) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.
(2) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 8% simple interest?
(3) If John paid $3712 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.
(5) How much loan did Barbara borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6382.5 to clear it?
(6) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.
(8) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 9% simple interest?
(9) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 7 years.