Question:
What amount does James have to pay after 5 years if he takes a loan of $3000 at 3% simple interest?
Correct Answer
$3450
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 3%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3000 × 3% × 5
= $3000 ×3/100 × 5
= 3000 × 3 × 5/100
= 9000 × 5/100
= 45000/100
= $450
Thus, Simple Interest = $450
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 = $3000 + $450
= $3450
Thus, Amount to be paid = $3450 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 = $3000
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3000 + ($3000 × 3% × 5)
= $3000 + ($3000 ×3/100 × 5)
= $3000 + (3000 × 3 × 5/100)
= $3000 + (9000 × 5/100)
= $3000 + (45000/100)
= $3000 + $450 = $3450
Thus, Amount (A) to be paid = $3450 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3000, the simple interest in 1 year
= 3/100 × 3000
= 3 × 3000/100
= 9000/100 = $90
Thus, simple interest for 1 year = $90
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $90 × 5 = $450
Thus, Simple Interest (SI) = $450
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $450
= $3450
Thus, Amount to be paid = $3450 Answer
Similar Questions
(1) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(3) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5576 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?
(5) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.
(8) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11584 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 8 years.
(10) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.