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) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 4 years.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.
(4) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 4% simple interest?
(5) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if William borrowed a sum of $3250 at a 8% simple interest?
(7) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 4 years.
(8) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 8 years.
(9) How much loan did Richard borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6160 to clear it?
(10) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.