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) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(3) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?
(4) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 8 years.
(6) In how much time a principal of $3150 will amount to $3528 at a simple interest of 4% per annum?
(7) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(8) If Joseph paid $4144 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(10) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 2% simple interest.