Question:
What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
Correct Answer
$3540
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 3%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 6
= $3000 ×3/100 × 6
= 3000 × 3 × 6/100
= 9000 × 6/100
= 54000/100
= $540
Thus, Simple Interest = $540
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 + $540
= $3540
Thus, Amount to be paid = $3540 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) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3000 + ($3000 × 3% × 6)
= $3000 + ($3000 ×3/100 × 6)
= $3000 + (3000 × 3 × 6/100)
= $3000 + (9000 × 6/100)
= $3000 + (54000/100)
= $3000 + $540 = $3540
Thus, Amount (A) to be paid = $3540 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3000, the simple interest in 1 year
= 3/100 × 3000
= 3 × 3000/100
= 9000/100 = $90
Thus, simple interest for 1 year = $90
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $90 × 6 = $540
Thus, Simple Interest (SI) = $540
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $540
= $3540
Thus, Amount to be paid = $3540 Answer
Similar Questions
(1) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 4% simple interest?
(2) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(3) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(4) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(5) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) 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?
(7) Lisa had to pay $4536 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 3 years.
(10) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.