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) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 3 years.
(3) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 7% simple interest?
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?
(5) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(7) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(8) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 7% simple interest?
(9) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.