Question:
Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 4 years.
Correct Answer
$3480
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 4%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 4
= $3000 ×4/100 × 4
= 3000 × 4 × 4/100
= 12000 × 4/100
= 48000/100
= $480
Thus, Simple Interest = $480
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 + $480
= $3480
Thus, Amount to be paid = $3480 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) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3000 + ($3000 × 4% × 4)
= $3000 + ($3000 ×4/100 × 4)
= $3000 + (3000 × 4 × 4/100)
= $3000 + (12000 × 4/100)
= $3000 + (48000/100)
= $3000 + $480 = $3480
Thus, Amount (A) to be paid = $3480 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3000, the simple interest in 1 year
= 4/100 × 3000
= 4 × 3000/100
= 12000/100 = $120
Thus, simple interest for 1 year = $120
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $120 × 4 = $480
Thus, Simple Interest (SI) = $480
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $480
= $3480
Thus, Amount to be paid = $3480 Answer
Similar Questions
(1) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 3 years.
(3) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(4) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.
(5) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(6) How much loan did Karen borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6842.5 to clear it?
(7) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?
(10) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?