Question:
What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 2% simple interest?
Correct Answer
$4180
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 2% × 5
= $3800 ×2/100 × 5
= 3800 × 2 × 5/100
= 7600 × 5/100
= 38000/100
= $380
Thus, Simple Interest = $380
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 + $380
= $4180
Thus, Amount to be paid = $4180 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) = 2%
And, Time (t) = 5 years
Thus, Amount (A)
= $3800 + ($3800 × 2% × 5)
= $3800 + ($3800 ×2/100 × 5)
= $3800 + (3800 × 2 × 5/100)
= $3800 + (7600 × 5/100)
= $3800 + (38000/100)
= $3800 + $380 = $4180
Thus, Amount (A) to be paid = $4180 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 $3800, the simple interest in 1 year
= 2/100 × 3800
= 2 × 3800/100
= 7600/100 = $76
Thus, simple interest for 1 year = $76
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $76 × 5 = $380
Thus, Simple Interest (SI) = $380
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $380
= $4180
Thus, Amount to be paid = $4180 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 7 years.
(2) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 5% simple interest?
(3) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 8 years.
(4) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $11524 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 8 years.
(6) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.
(8) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 9% simple interest?
(10) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 6% simple interest?