Question:
Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 4 years.
Correct Answer
$4080
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 9%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 4
= $3000 ×9/100 × 4
= 3000 × 9 × 4/100
= 27000 × 4/100
= 108000/100
= $1080
Thus, Simple Interest = $1080
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 + $1080
= $4080
Thus, Amount to be paid = $4080 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) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3000 + ($3000 × 9% × 4)
= $3000 + ($3000 ×9/100 × 4)
= $3000 + (3000 × 9 × 4/100)
= $3000 + (27000 × 4/100)
= $3000 + (108000/100)
= $3000 + $1080 = $4080
Thus, Amount (A) to be paid = $4080 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3000, the simple interest in 1 year
= 9/100 × 3000
= 9 × 3000/100
= 27000/100 = $270
Thus, simple interest for 1 year = $270
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $270 × 4 = $1080
Thus, Simple Interest (SI) = $1080
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $1080
= $4080
Thus, Amount to be paid = $4080 Answer
Similar Questions
(1) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8415 to clear it?
(3) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(4) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 5% per annum?
(5) How much loan did Karen borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6545 to clear it?
(6) If Kimberly paid $5394 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.
(8) How much loan did Christopher borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6600 to clear it?
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 3 years.
(10) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.