Question:
What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 5% simple interest?
Correct Answer
$3937.5
Solution And Explanation
Solution
Given,
Principal (P) = $3150
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) = $3150 × 5% × 5
= $3150 ×5/100 × 5
= 3150 × 5 × 5/100
= 15750 × 5/100
= 78750/100
= $787.5
Thus, Simple Interest = $787.5
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 = $3150 + $787.5
= $3937.5
Thus, Amount to be paid = $3937.5 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 = $3150
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3150 + ($3150 × 5% × 5)
= $3150 + ($3150 ×5/100 × 5)
= $3150 + (3150 × 5 × 5/100)
= $3150 + (15750 × 5/100)
= $3150 + (78750/100)
= $3150 + $787.5 = $3937.5
Thus, Amount (A) to be paid = $3937.5 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 $3150, the simple interest in 1 year
= 5/100 × 3150
= 5 × 3150/100
= 15750/100 = $157.5
Thus, simple interest for 1 year = $157.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $157.5 × 5 = $787.5
Thus, Simple Interest (SI) = $787.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3150 + $787.5
= $3937.5
Thus, Amount to be paid = $3937.5 Answer
Similar Questions
(1) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?
(2) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) If Mark paid $4752 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 4 years.
(5) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 7% simple interest?
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 3 years.
(7) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 7 years.
(8) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?
(9) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.