Question:
What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 3% simple interest?
Correct Answer
$4140
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 3% × 5
= $3600 ×3/100 × 5
= 3600 × 3 × 5/100
= 10800 × 5/100
= 54000/100
= $540
Thus, Simple Interest = $540
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 = $3600 + $540
= $4140
Thus, Amount to be paid = $4140 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 = $3600
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3600 + ($3600 × 3% × 5)
= $3600 + ($3600 ×3/100 × 5)
= $3600 + (3600 × 3 × 5/100)
= $3600 + (10800 × 5/100)
= $3600 + (54000/100)
= $3600 + $540 = $4140
Thus, Amount (A) to be paid = $4140 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 $3600, the simple interest in 1 year
= 3/100 × 3600
= 3 × 3600/100
= 10800/100 = $108
Thus, simple interest for 1 year = $108
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $108 × 5 = $540
Thus, Simple Interest (SI) = $540
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $540
= $4140
Thus, Amount to be paid = $4140 Answer
Similar Questions
(1) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 7% simple interest.
(2) How much loan did Amanda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7865 to clear it?
(3) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 3 years.
(4) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(5) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?
(6) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(7) Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.
(8) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 8 years.
(9) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8688 to clear the loan, then find the time period of the loan.
(10) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.