Question:
What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
Correct Answer
$4370
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 3% × 5
= $3800 ×3/100 × 5
= 3800 × 3 × 5/100
= 11400 × 5/100
= 57000/100
= $570
Thus, Simple Interest = $570
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 = $3800 + $570
= $4370
Thus, Amount to be paid = $4370 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 = $3800
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3800 + ($3800 × 3% × 5)
= $3800 + ($3800 ×3/100 × 5)
= $3800 + (3800 × 3 × 5/100)
= $3800 + (11400 × 5/100)
= $3800 + (57000/100)
= $3800 + $570 = $4370
Thus, Amount (A) to be paid = $4370 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 $3800, the simple interest in 1 year
= 3/100 × 3800
= 3 × 3800/100
= 11400/100 = $114
Thus, simple interest for 1 year = $114
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $114 × 5 = $570
Thus, Simple Interest (SI) = $570
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $570
= $4370
Thus, Amount to be paid = $4370 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6683 to clear the loan, then find the time period of the loan.
(2) If Anthony paid $4644 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(4) Michael had to pay $3498 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.
(6) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 4% simple interest?
(7) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9676 to clear the loan, then find the time period of the loan.
(8) If Barbara paid $4260 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 3 years.
(10) Mary had to pay $3507.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.