Question:
Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 3 years.
Correct Answer
$3900
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 10%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 3
= $3000 ×10/100 × 3
= 3000 × 10 × 3/100
= 30000 × 3/100
= 90000/100
= $900
Thus, Simple Interest = $900
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 + $900
= $3900
Thus, Amount to be paid = $3900 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) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3000 + ($3000 × 10% × 3)
= $3000 + ($3000 ×10/100 × 3)
= $3000 + (3000 × 10 × 3/100)
= $3000 + (30000 × 3/100)
= $3000 + (90000/100)
= $3000 + $900 = $3900
Thus, Amount (A) to be paid = $3900 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3000, the simple interest in 1 year
= 10/100 × 3000
= 10 × 3000/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $300 × 3 = $900
Thus, Simple Interest (SI) = $900
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $900
= $3900
Thus, Amount to be paid = $3900 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(3) What amount will be due after 2 years if William borrowed a sum of $3250 at a 6% simple interest?
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 6% simple interest?
(5) How much loan did Timothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8510 to clear it?
(6) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(7) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7172 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(10) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.