Question:
Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.
Correct Answer
$3968
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 8% × 3
= $3200 ×8/100 × 3
= 3200 × 8 × 3/100
= 25600 × 3/100
= 76800/100
= $768
Thus, Simple Interest = $768
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 + $768
= $3968
Thus, Amount to be paid = $3968 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) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3200 + ($3200 × 8% × 3)
= $3200 + ($3200 ×8/100 × 3)
= $3200 + (3200 × 8 × 3/100)
= $3200 + (25600 × 3/100)
= $3200 + (76800/100)
= $3200 + $768 = $3968
Thus, Amount (A) to be paid = $3968 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 $3200, the simple interest in 1 year
= 8/100 × 3200
= 8 × 3200/100
= 25600/100 = $256
Thus, simple interest for 1 year = $256
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $256 × 3 = $768
Thus, Simple Interest (SI) = $768
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $768
= $3968
Thus, Amount to be paid = $3968 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(2) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?
(3) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 to clear the loan, then find the time period of the loan.
(4) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 9% simple interest for 8 years.
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 4 years.
(7) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 8 years.
(9) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 8% simple interest?
(10) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 9% simple interest.