Question:
What amount does William have to pay after 5 years if he takes a loan of $3500 at 5% simple interest?
Correct Answer
$4375
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 5% × 5
= $3500 ×5/100 × 5
= 3500 × 5 × 5/100
= 17500 × 5/100
= 87500/100
= $875
Thus, Simple Interest = $875
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 = $3500 + $875
= $4375
Thus, Amount to be paid = $4375 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 = $3500
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3500 + ($3500 × 5% × 5)
= $3500 + ($3500 ×5/100 × 5)
= $3500 + (3500 × 5 × 5/100)
= $3500 + (17500 × 5/100)
= $3500 + (87500/100)
= $3500 + $875 = $4375
Thus, Amount (A) to be paid = $4375 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 $3500, the simple interest in 1 year
= 5/100 × 3500
= 5 × 3500/100
= 17500/100 = $175
Thus, simple interest for 1 year = $175
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $175 × 5 = $875
Thus, Simple Interest (SI) = $875
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $875
= $4375
Thus, Amount to be paid = $4375 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?
(2) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 10% simple interest?
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 7 years.
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?
(5) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.
(6) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 4% simple interest?
(7) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.
(8) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(9) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 7% simple interest?
(10) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.