Question:
Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 4 years.
Correct Answer
$3360
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 3%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3000 × 3% × 4
= $3000 ×3/100 × 4
= 3000 × 3 × 4/100
= 9000 × 4/100
= 36000/100
= $360
Thus, Simple Interest = $360
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 = $3000 + $360
= $3360
Thus, Amount to be paid = $3360 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 = $3000
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3000 + ($3000 × 3% × 4)
= $3000 + ($3000 ×3/100 × 4)
= $3000 + (3000 × 3 × 4/100)
= $3000 + (9000 × 4/100)
= $3000 + (36000/100)
= $3000 + $360 = $3360
Thus, Amount (A) to be paid = $3360 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3000, the simple interest in 1 year
= 3/100 × 3000
= 3 × 3000/100
= 9000/100 = $90
Thus, simple interest for 1 year = $90
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $90 × 4 = $360
Thus, Simple Interest (SI) = $360
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $360
= $3360
Thus, Amount to be paid = $3360 Answer
Similar Questions
(1) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 3 years.
(2) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?
(3) James had to pay $3360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $7310 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 7 years.
(6) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(7) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 10% simple interest?
(8) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6267.5 to clear it?
(9) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Barbara borrowed a sum of $3550 at 10% simple interest for 3 years.