Question:
Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.
Correct Answer
$4200
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 10%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 4
= $3000 ×10/100 × 4
= 3000 × 10 × 4/100
= 30000 × 4/100
= 120000/100
= $1200
Thus, Simple Interest = $1200
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 + $1200
= $4200
Thus, Amount to be paid = $4200 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) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3000 + ($3000 × 10% × 4)
= $3000 + ($3000 ×10/100 × 4)
= $3000 + (3000 × 10 × 4/100)
= $3000 + (30000 × 4/100)
= $3000 + (120000/100)
= $3000 + $1200 = $4200
Thus, Amount (A) to be paid = $4200 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3000, the simple interest in 1 year
= 10/100 × 3000
= 10 × 3000/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $300 × 4 = $1200
Thus, Simple Interest (SI) = $1200
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $1200
= $4200
Thus, Amount to be paid = $4200 Answer
Similar Questions
(1) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 10% simple interest?
(2) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(3) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10452 to clear the loan, then find the time period of the loan.
(4) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $7752 to clear the loan, then find the time period of the loan.
(5) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 3% simple interest?
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 3 years.
(7) Richard had to pay $3816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(10) Kenneth had to pay $5450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.