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) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(2) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?
(3) Calculate the amount due if Christopher borrowed a sum of $4000 at 9% simple interest for 4 years.
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 3 years.
(5) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(6) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 9% simple interest for 7 years.
(8) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
(10) What amount does James have to pay after 5 years if he takes a loan of $3000 at 2% simple interest?