Question:
Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 4 years.
Correct Answer
$3720
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 6%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 4
= $3000 ×6/100 × 4
= 3000 × 6 × 4/100
= 18000 × 4/100
= 72000/100
= $720
Thus, Simple Interest = $720
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 + $720
= $3720
Thus, Amount to be paid = $3720 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) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3000 + ($3000 × 6% × 4)
= $3000 + ($3000 ×6/100 × 4)
= $3000 + (3000 × 6 × 4/100)
= $3000 + (18000 × 4/100)
= $3000 + (72000/100)
= $3000 + $720 = $3720
Thus, Amount (A) to be paid = $3720 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3000, the simple interest in 1 year
= 6/100 × 3000
= 6 × 3000/100
= 18000/100 = $180
Thus, simple interest for 1 year = $180
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $180 × 4 = $720
Thus, Simple Interest (SI) = $720
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $720
= $3720
Thus, Amount to be paid = $3720 Answer
Similar Questions
(1) What amount will be due after 2 years if James borrowed a sum of $3000 at a 9% simple interest?
(2) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $13300 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 3 years.
(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 2% simple interest?
(5) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(6) Joshua had to pay $5341 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 4 years.
(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(9) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 8 years.