Question:
Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.
Correct Answer
$4420
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 10% × 3
= $3400 ×10/100 × 3
= 3400 × 10 × 3/100
= 34000 × 3/100
= 102000/100
= $1020
Thus, Simple Interest = $1020
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 = $3400 + $1020
= $4420
Thus, Amount to be paid = $4420 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 = $3400
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3400 + ($3400 × 10% × 3)
= $3400 + ($3400 ×10/100 × 3)
= $3400 + (3400 × 10 × 3/100)
= $3400 + (34000 × 3/100)
= $3400 + (102000/100)
= $3400 + $1020 = $4420
Thus, Amount (A) to be paid = $4420 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 $3400, the simple interest in 1 year
= 10/100 × 3400
= 10 × 3400/100
= 34000/100 = $340
Thus, simple interest for 1 year = $340
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $340 × 3 = $1020
Thus, Simple Interest (SI) = $1020
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $1020
= $4420
Thus, Amount to be paid = $4420 Answer
Similar Questions
(1) William had to pay $3920 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) If Paul paid $5452 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) How much loan did Mark borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7040 to clear it?
(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(5) How much loan did Susan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7062.5 to clear it?
(6) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 10% simple interest?
(7) Sarah had to pay $4081 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 8 years.
(9) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.