Question:
Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 3 years.
Correct Answer
$4370
Solution And Explanation
Solution
Given,
Principal (P) = $3800
Rate of Simple Interest (SI) = 5%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3800 × 5% × 3
= $3800 ×5/100 × 3
= 3800 × 5 × 3/100
= 19000 × 3/100
= 57000/100
= $570
Thus, Simple Interest = $570
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 = $3800 + $570
= $4370
Thus, Amount to be paid = $4370 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 = $3800
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3800 + ($3800 × 5% × 3)
= $3800 + ($3800 ×5/100 × 3)
= $3800 + (3800 × 5 × 3/100)
= $3800 + (19000 × 3/100)
= $3800 + (57000/100)
= $3800 + $570 = $4370
Thus, Amount (A) to be paid = $4370 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3800, the simple interest in 1 year
= 5/100 × 3800
= 5 × 3800/100
= 19000/100 = $190
Thus, simple interest for 1 year = $190
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $190 × 3 = $570
Thus, Simple Interest (SI) = $570
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $570
= $4370
Thus, Amount to be paid = $4370 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 7% simple interest.
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 7 years.
(3) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 8 years.
(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 9% simple interest?
(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 8% simple interest?
(7) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(8) If Jennifer paid $3770 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.