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) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 7 years.
(2) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(3) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 4 years.
(5) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(7) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 4 years.
(8) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?
(9) How much loan did Daniel borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7625 to clear it?
(10) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 to clear the loan, then find the time period of the loan.