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) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(2) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $12400 to clear the loan, then find the time period of the loan.
(3) In how much time a principal of $3000 will amount to $3240 at a simple interest of 2% per annum?
(4) How much loan did Paul borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7705 to clear it?
(5) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.
(6) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 9% simple interest?
(7) In how much time a principal of $3000 will amount to $3750 at a simple interest of 5% per annum?
(8) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 7 years.