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 Lisa paid $4536 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(3) What amount does William have to pay after 6 years if he takes a loan of $3500 at 8% simple interest?
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(5) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(6) Christopher had to pay $4360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(9) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(10) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 7% simple interest?