Question:
Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 3 years.
Correct Answer
$3720
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 8%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 3
= $3000 ×8/100 × 3
= 3000 × 8 × 3/100
= 24000 × 3/100
= 72000/100
= $720
Thus, Simple Interest = $720
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 + $720
= $3720
Thus, Amount to be paid = $3720 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) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3000 + ($3000 × 8% × 3)
= $3000 + ($3000 ×8/100 × 3)
= $3000 + (3000 × 8 × 3/100)
= $3000 + (24000 × 3/100)
= $3000 + (72000/100)
= $3000 + $720 = $3720
Thus, Amount (A) to be paid = $3720 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3000, the simple interest in 1 year
= 8/100 × 3000
= 8 × 3000/100
= 24000/100 = $240
Thus, simple interest for 1 year = $240
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $240 × 3 = $720
Thus, Simple Interest (SI) = $720
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $720
= $3720
Thus, Amount to be paid = $3720 Answer
Similar Questions
(1) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(2) If William paid $4060 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Elizabeth had to pay $3967.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) If Emily paid $5510 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?
(6) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 4 years.
(7) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
(8) How much loan did Barbara borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6937.5 to clear it?
(9) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 9% simple interest.