Question:
Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 4 years.
Correct Answer
$3584
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 3% × 4
= $3200 ×3/100 × 4
= 3200 × 3 × 4/100
= 9600 × 4/100
= 38400/100
= $384
Thus, Simple Interest = $384
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 = $3200 + $384
= $3584
Thus, Amount to be paid = $3584 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 = $3200
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3200 + ($3200 × 3% × 4)
= $3200 + ($3200 ×3/100 × 4)
= $3200 + (3200 × 3 × 4/100)
= $3200 + (9600 × 4/100)
= $3200 + (38400/100)
= $3200 + $384 = $3584
Thus, Amount (A) to be paid = $3584 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 $3200, the simple interest in 1 year
= 3/100 × 3200
= 3 × 3200/100
= 9600/100 = $96
Thus, simple interest for 1 year = $96
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $96 × 4 = $384
Thus, Simple Interest (SI) = $384
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $384
= $3584
Thus, Amount to be paid = $3584 Answer
Similar Questions
(1) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 3 years.
(2) 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.
(3) If Betty paid $4930 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) 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?
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 4 years.
(6) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 4% simple interest for 3 years.
(8) If Richard paid $3888 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8528 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?