Question:
( 1 of 10 ) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$3000
Correct Answer
$3960
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 8%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 4
= $3000 ×8/100 × 4
= 3000 × 8 × 4/100
= 24000 × 4/100
= 96000/100
= $960
Thus, Simple Interest = $960
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 + $960
= $3960
Thus, Amount to be paid = $3960 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) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3000 + ($3000 × 8% × 4)
= $3000 + ($3000 ×8/100 × 4)
= $3000 + (3000 × 8 × 4/100)
= $3000 + (24000 × 4/100)
= $3000 + (96000/100)
= $3000 + $960 = $3960
Thus, Amount (A) to be paid = $3960 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3000, the simple interest in 1 year
= 8/100 × 3000
= 8 × 3000/100
= 24000/100 = $240
Thus, simple interest for 1 year = $240
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $240 × 4 = $960
Thus, Simple Interest (SI) = $960
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $960
= $3960
Thus, Amount to be paid = $3960 Answer
Similar Questions
(1) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 7 years.
(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(3) How much loan did Patricia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5665 to clear it?
(4) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(5) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 8% simple interest?
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.
(7) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(8) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 2% simple interest?
(9) James had to pay $3450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 8 years.