Question:
What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 5% simple interest?
Correct Answer
$3812.5
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 5% × 5
= $3050 ×5/100 × 5
= 3050 × 5 × 5/100
= 15250 × 5/100
= 76250/100
= $762.5
Thus, Simple Interest = $762.5
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 + $762.5
= $3812.5
Thus, Amount to be paid = $3812.5 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) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3050 + ($3050 × 5% × 5)
= $3050 + ($3050 ×5/100 × 5)
= $3050 + (3050 × 5 × 5/100)
= $3050 + (15250 × 5/100)
= $3050 + (76250/100)
= $3050 + $762.5 = $3812.5
Thus, Amount (A) to be paid = $3812.5 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 $3050, the simple interest in 1 year
= 5/100 × 3050
= 5 × 3050/100
= 15250/100 = $152.5
Thus, simple interest for 1 year = $152.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $152.5 × 5 = $762.5
Thus, Simple Interest (SI) = $762.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $762.5
= $3812.5
Thus, Amount to be paid = $3812.5 Answer
Similar Questions
(1) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 4 years.
(3) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?
(4) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 3 years.
(6) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?
(7) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 6% simple interest?
(9) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 8% simple interest?
(10) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.