Question:
What amount does John have to pay after 5 years if he takes a loan of $3200 at 3% simple interest?
Correct Answer
$3680
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 3% × 5
= $3200 ×3/100 × 5
= 3200 × 3 × 5/100
= 9600 × 5/100
= 48000/100
= $480
Thus, Simple Interest = $480
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 = $3200 + $480
= $3680
Thus, Amount to be paid = $3680 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 = $3200
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3200 + ($3200 × 3% × 5)
= $3200 + ($3200 ×3/100 × 5)
= $3200 + (3200 × 3 × 5/100)
= $3200 + (9600 × 5/100)
= $3200 + (48000/100)
= $3200 + $480 = $3680
Thus, Amount (A) to be paid = $3680 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 $3200, the simple interest in 1 year
= 3/100 × 3200
= 3 × 3200/100
= 9600/100 = $96
Thus, simple interest for 1 year = $96
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $96 × 5 = $480
Thus, Simple Interest (SI) = $480
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $480
= $3680
Thus, Amount to be paid = $3680 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.
(2) Barbara had to pay $3869.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.
(4) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7975 to clear it?
(5) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(6) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 8 years.
(7) How much loan did Patricia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5922.5 to clear it?
(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 8 years.
(9) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 7% simple interest for 3 years.