Question:
Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.
Correct Answer
$3600
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 5%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 4
= $3000 ×5/100 × 4
= 3000 × 5 × 4/100
= 15000 × 4/100
= 60000/100
= $600
Thus, Simple Interest = $600
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 + $600
= $3600
Thus, Amount to be paid = $3600 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) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3000 + ($3000 × 5% × 4)
= $3000 + ($3000 ×5/100 × 4)
= $3000 + (3000 × 5 × 4/100)
= $3000 + (15000 × 4/100)
= $3000 + (60000/100)
= $3000 + $600 = $3600
Thus, Amount (A) to be paid = $3600 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3000, the simple interest in 1 year
= 5/100 × 3000
= 5 × 3000/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $150 × 4 = $600
Thus, Simple Interest (SI) = $600
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $600
= $3600
Thus, Amount to be paid = $3600 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6683 to clear the loan, then find the time period of the loan.
(2) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9360 to clear it?
(3) What amount will be due after 2 years if David borrowed a sum of $3200 at a 8% simple interest?
(4) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(5) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 6% simple interest?
(6) How much loan did Kevin borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8875 to clear it?
(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.
(8) Calculate the amount due if Patricia borrowed a sum of $3150 at 9% simple interest for 3 years.
(9) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.