Question:
Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.
Correct Answer
$3965
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 10% × 3
= $3050 ×10/100 × 3
= 3050 × 10 × 3/100
= 30500 × 3/100
= 91500/100
= $915
Thus, Simple Interest = $915
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 = $3050 + $915
= $3965
Thus, Amount to be paid = $3965 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 = $3050
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3050 + ($3050 × 10% × 3)
= $3050 + ($3050 ×10/100 × 3)
= $3050 + (3050 × 10 × 3/100)
= $3050 + (30500 × 3/100)
= $3050 + (91500/100)
= $3050 + $915 = $3965
Thus, Amount (A) to be paid = $3965 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 $3050, the simple interest in 1 year
= 10/100 × 3050
= 10 × 3050/100
= 30500/100 = $305
Thus, simple interest for 1 year = $305
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $305 × 3 = $915
Thus, Simple Interest (SI) = $915
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $915
= $3965
Thus, Amount to be paid = $3965 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(2) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.
(3) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 10% simple interest?
(4) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 7 years.
(5) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(7) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 2% simple interest?
(8) How much loan did Mark borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8000 to clear it?
(9) What amount does David have to pay after 5 years if he takes a loan of $3400 at 8% simple interest?
(10) Patricia had to pay $3339 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.