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 will be due after 2 years if Kenneth borrowed a sum of $4000 at a 4% simple interest?
(2) How much loan did Sarah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7020 to clear it?
(3) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 8 years.
(4) If Mary paid $3660 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.
(7) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8856 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 6% simple interest?
(9) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.
(10) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 4 years.