Question:
What amount does David have to pay after 5 years if he takes a loan of $3400 at 3% simple interest?
Correct Answer
$3910
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 3% × 5
= $3400 ×3/100 × 5
= 3400 × 3 × 5/100
= 10200 × 5/100
= 51000/100
= $510
Thus, Simple Interest = $510
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 = $3400 + $510
= $3910
Thus, Amount to be paid = $3910 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 = $3400
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3400 + ($3400 × 3% × 5)
= $3400 + ($3400 ×3/100 × 5)
= $3400 + (3400 × 3 × 5/100)
= $3400 + (10200 × 5/100)
= $3400 + (51000/100)
= $3400 + $510 = $3910
Thus, Amount (A) to be paid = $3910 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 $3400, the simple interest in 1 year
= 3/100 × 3400
= 3 × 3400/100
= 10200/100 = $102
Thus, simple interest for 1 year = $102
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $102 × 5 = $510
Thus, Simple Interest (SI) = $510
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $510
= $3910
Thus, Amount to be paid = $3910 Answer
Similar Questions
(1) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.
(3) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(4) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.
(6) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 3 years.
(8) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 3 years.
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.