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) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(3) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 7 years.
(4) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(5) Andrew had to pay $5376 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) If Lisa paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 2% simple interest?
(8) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8313 to clear the loan, then find the time period of the loan.
(9) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 2% simple interest?
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 3 years.