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) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 9% simple interest?
(2) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9536 to clear the loan, then find the time period of the loan.
(3) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?
(4) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(6) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(7) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.
(9) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(10) If Jennifer paid $3510 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.