Question:
What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 3% simple interest?
Correct Answer
$3507.5
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 3% × 5
= $3050 ×3/100 × 5
= 3050 × 3 × 5/100
= 9150 × 5/100
= 45750/100
= $457.5
Thus, Simple Interest = $457.5
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 = $3050 + $457.5
= $3507.5
Thus, Amount to be paid = $3507.5 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 = $3050
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3050 + ($3050 × 3% × 5)
= $3050 + ($3050 ×3/100 × 5)
= $3050 + (3050 × 3 × 5/100)
= $3050 + (9150 × 5/100)
= $3050 + (45750/100)
= $3050 + $457.5 = $3507.5
Thus, Amount (A) to be paid = $3507.5 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 $3050, the simple interest in 1 year
= 3/100 × 3050
= 3 × 3050/100
= 9150/100 = $91.5
Thus, simple interest for 1 year = $91.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $91.5 × 5 = $457.5
Thus, Simple Interest (SI) = $457.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $457.5
= $3507.5
Thus, Amount to be paid = $3507.5 Answer
Similar Questions
(1) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 7 years.
(3) In how much time a principal of $3150 will amount to $3780 at a simple interest of 5% per annum?
(4) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(5) If Patricia paid $3402 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?
(8) What amount will be due after 2 years if David borrowed a sum of $3200 at a 9% simple interest?
(9) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
(10) If Ashley paid $5096 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.