Question:
What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 3% simple interest?
Correct Answer
$4485
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 3% × 5
= $3900 ×3/100 × 5
= 3900 × 3 × 5/100
= 11700 × 5/100
= 58500/100
= $585
Thus, Simple Interest = $585
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 = $3900 + $585
= $4485
Thus, Amount to be paid = $4485 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 = $3900
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3900 + ($3900 × 3% × 5)
= $3900 + ($3900 ×3/100 × 5)
= $3900 + (3900 × 3 × 5/100)
= $3900 + (11700 × 5/100)
= $3900 + (58500/100)
= $3900 + $585 = $4485
Thus, Amount (A) to be paid = $4485 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 $3900, the simple interest in 1 year
= 3/100 × 3900
= 3 × 3900/100
= 11700/100 = $117
Thus, simple interest for 1 year = $117
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $117 × 5 = $585
Thus, Simple Interest (SI) = $585
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $585
= $4485
Thus, Amount to be paid = $4485 Answer
Similar Questions
(1) Linda had to pay $3651.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) If David paid $4080 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 8% simple interest.
(4) Find the amount to be paid if Mary borrowed a sum of $5050 at 3% simple interest for 8 years.
(5) Daniel had to pay $4592 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
(7) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(8) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 10% simple interest?
(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.
(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.