Question:
What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 4% simple interest?
Correct Answer
$3660
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 4%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3050 × 4% × 5
= $3050 ×4/100 × 5
= 3050 × 4 × 5/100
= 12200 × 5/100
= 61000/100
= $610
Thus, Simple Interest = $610
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 = $3050 + $610
= $3660
Thus, Amount to be paid = $3660 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 = $3050
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 5 years
Thus, Amount (A)
= $3050 + ($3050 × 4% × 5)
= $3050 + ($3050 ×4/100 × 5)
= $3050 + (3050 × 4 × 5/100)
= $3050 + (12200 × 5/100)
= $3050 + (61000/100)
= $3050 + $610 = $3660
Thus, Amount (A) to be paid = $3660 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3050, the simple interest in 1 year
= 4/100 × 3050
= 4 × 3050/100
= 12200/100 = $122
Thus, simple interest for 1 year = $122
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $122 × 5 = $610
Thus, Simple Interest (SI) = $610
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $610
= $3660
Thus, Amount to be paid = $3660 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(2) Michael had to pay $3597 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.
(4) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8145 to clear the loan, then find the time period of the loan.
(5) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.
(6) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?
(7) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 6% simple interest?
(8) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.
(9) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(10) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $11000 to clear the loan, then find the time period of the loan.