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) How much loan did James borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5750 to clear it?
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 4% simple interest for 7 years.
(3) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.
(4) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $10660 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.
(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(8) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(9) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9774 to clear the loan, then find the time period of the loan.
(10) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7964 to clear the loan, then find the time period of the loan.