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) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?
(2) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 4 years.
(3) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.
(4) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 8% simple interest?
(5) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $10920 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?
(7) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.
(9) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(10) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?