Question:
What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 2% simple interest?
Correct Answer
$3355
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 2%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3050 × 2% × 5
= $3050 ×2/100 × 5
= 3050 × 2 × 5/100
= 6100 × 5/100
= 30500/100
= $305
Thus, Simple Interest = $305
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 = $3050 + $305
= $3355
Thus, Amount to be paid = $3355 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 = $3050
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 5 years
Thus, Amount (A)
= $3050 + ($3050 × 2% × 5)
= $3050 + ($3050 ×2/100 × 5)
= $3050 + (3050 × 2 × 5/100)
= $3050 + (6100 × 5/100)
= $3050 + (30500/100)
= $3050 + $305 = $3355
Thus, Amount (A) to be paid = $3355 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3050, the simple interest in 1 year
= 2/100 × 3050
= 2 × 3050/100
= 6100/100 = $61
Thus, simple interest for 1 year = $61
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $61 × 5 = $305
Thus, Simple Interest (SI) = $305
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $305
= $3355
Thus, Amount to be paid = $3355 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.
(2) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(3) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $8344 to clear the loan, then find the time period of the loan.
(4) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(5) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 5% simple interest?
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 8 years.
(7) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 8% simple interest?
(8) How much loan did Emily borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8100 to clear it?
(9) Betty had to pay $4887.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.