Question:
What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 4% simple interest?
Correct Answer
$4560
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 4% × 5
= $3800 ×4/100 × 5
= 3800 × 4 × 5/100
= 15200 × 5/100
= 76000/100
= $760
Thus, Simple Interest = $760
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 + $760
= $4560
Thus, Amount to be paid = $4560 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) = 4%
And, Time (t) = 5 years
Thus, Amount (A)
= $3800 + ($3800 × 4% × 5)
= $3800 + ($3800 ×4/100 × 5)
= $3800 + (3800 × 4 × 5/100)
= $3800 + (15200 × 5/100)
= $3800 + (76000/100)
= $3800 + $760 = $4560
Thus, Amount (A) to be paid = $4560 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 $3800, the simple interest in 1 year
= 4/100 × 3800
= 4 × 3800/100
= 15200/100 = $152
Thus, simple interest for 1 year = $152
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $152 × 5 = $760
Thus, Simple Interest (SI) = $760
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $760
= $4560
Thus, Amount to be paid = $4560 Answer
Similar Questions
(1) In how much time a principal of $3200 will amount to $3584 at a simple interest of 4% per annum?
(2) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?
(4) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?
(5) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(6) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 2% simple interest?
(7) How much loan did Michelle borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8687.5 to clear it?
(8) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 9% simple interest?
(9) Elizabeth had to pay $3864 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 2% simple interest?