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) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 8% simple interest?
(2) Kenneth had to pay $5600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 6% simple interest?
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 4 years.
(5) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(6) In how much time a principal of $3000 will amount to $3300 at a simple interest of 5% per annum?
(7) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7344 to clear the loan, then find the time period of the loan.
(8) If Barbara borrowed $3550 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(10) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 7% simple interest?