Question:
Calculate the amount due if William borrowed a sum of $3500 at 8% simple interest for 3 years.
Correct Answer
$4340
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 8% × 3
= $3500 ×8/100 × 3
= 3500 × 8 × 3/100
= 28000 × 3/100
= 84000/100
= $840
Thus, Simple Interest = $840
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 = $3500 + $840
= $4340
Thus, Amount to be paid = $4340 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 = $3500
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3500 + ($3500 × 8% × 3)
= $3500 + ($3500 ×8/100 × 3)
= $3500 + (3500 × 8 × 3/100)
= $3500 + (28000 × 3/100)
= $3500 + (84000/100)
= $3500 + $840 = $4340
Thus, Amount (A) to be paid = $4340 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 $3500, the simple interest in 1 year
= 8/100 × 3500
= 8 × 3500/100
= 28000/100 = $280
Thus, simple interest for 1 year = $280
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $280 × 3 = $840
Thus, Simple Interest (SI) = $840
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $840
= $4340
Thus, Amount to be paid = $4340 Answer
Similar Questions
(1) William had to pay $3710 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) How much loan did Melissa borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9187.5 to clear it?
(3) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8050 to clear it?
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 7 years.
(5) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 8 years.
(6) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.
(7) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?
(9) If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.