Question:
What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
Correct Answer
$3750
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 5%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3000 × 5% × 5
= $3000 ×5/100 × 5
= 3000 × 5 × 5/100
= 15000 × 5/100
= 75000/100
= $750
Thus, Simple Interest = $750
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 = $3000 + $750
= $3750
Thus, Amount to be paid = $3750 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 = $3000
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3000 + ($3000 × 5% × 5)
= $3000 + ($3000 ×5/100 × 5)
= $3000 + (3000 × 5 × 5/100)
= $3000 + (15000 × 5/100)
= $3000 + (75000/100)
= $3000 + $750 = $3750
Thus, Amount (A) to be paid = $3750 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3000, the simple interest in 1 year
= 5/100 × 3000
= 5 × 3000/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $150 × 5 = $750
Thus, Simple Interest (SI) = $750
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $750
= $3750
Thus, Amount to be paid = $3750 Answer
Similar Questions
(1) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 3 years.
(2) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(3) How much loan did Matthew borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7130 to clear it?
(4) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 9% simple interest.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 3 years.
(6) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.
(8) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 4% simple interest?
(9) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 3% simple interest?
(10) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.