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) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?
(2) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $8704 to clear the loan, then find the time period of the loan.
(3) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 7% simple interest for 4 years.
(6) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.
(9) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 8 years.
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 7 years.