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) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 5% per annum?
(2) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.
(4) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(5) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $5984 to clear the loan, then find the time period of the loan.
(6) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6258 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 8 years.
(9) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?
(10) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.