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) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 6% simple interest?
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 3 years.
(3) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 4 years.
(4) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 6% simple interest?
(5) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 8% simple interest?
(6) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9593 to clear the loan, then find the time period of the loan.
(7) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $6528 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if James borrowed a sum of $3000 at a 7% simple interest?
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 3 years.
(10) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.