Question:
What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 2% simple interest?
Correct Answer
$3465
Solution And Explanation
Solution
Given,
Principal (P) = $3150
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) = $3150 × 2% × 5
= $3150 ×2/100 × 5
= 3150 × 2 × 5/100
= 6300 × 5/100
= 31500/100
= $315
Thus, Simple Interest = $315
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 = $3150 + $315
= $3465
Thus, Amount to be paid = $3465 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 = $3150
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 5 years
Thus, Amount (A)
= $3150 + ($3150 × 2% × 5)
= $3150 + ($3150 ×2/100 × 5)
= $3150 + (3150 × 2 × 5/100)
= $3150 + (6300 × 5/100)
= $3150 + (31500/100)
= $3150 + $315 = $3465
Thus, Amount (A) to be paid = $3465 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 $3150, the simple interest in 1 year
= 2/100 × 3150
= 2 × 3150/100
= 6300/100 = $63
Thus, simple interest for 1 year = $63
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $63 × 5 = $315
Thus, Simple Interest (SI) = $315
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $315
= $3465
Thus, Amount to be paid = $3465 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 3 years.
(2) If Mary borrowed $3050 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) If Anthony paid $5160 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) If Susan paid $3942 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 5% simple interest?
(7) Karen had to pay $4187 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(9) 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.
(10) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.