Question:
Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 3 years.
Correct Answer
$4160
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 10% × 3
= $3200 ×10/100 × 3
= 3200 × 10 × 3/100
= 32000 × 3/100
= 96000/100
= $960
Thus, Simple Interest = $960
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 + $960
= $4160
Thus, Amount to be paid = $4160 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) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3200 + ($3200 × 10% × 3)
= $3200 + ($3200 ×10/100 × 3)
= $3200 + (3200 × 10 × 3/100)
= $3200 + (32000 × 3/100)
= $3200 + (96000/100)
= $3200 + $960 = $4160
Thus, Amount (A) to be paid = $4160 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 $3200, the simple interest in 1 year
= 10/100 × 3200
= 10 × 3200/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $320 × 3 = $960
Thus, Simple Interest (SI) = $960
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $960
= $4160
Thus, Amount to be paid = $4160 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 8 years.
(4) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(5) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 9% simple interest?
(6) Betty had to pay $4505 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
(8) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 8 years.