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) If Patricia paid $3654 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 8% simple interest?
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.
(4) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 3 years.
(7) If Sarah borrowed $3850 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 4% simple interest.
(9) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 8 years.
(10) If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.