Question:
What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 5% simple interest?
Correct Answer
$4500
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 5% × 5
= $3600 ×5/100 × 5
= 3600 × 5 × 5/100
= 18000 × 5/100
= 90000/100
= $900
Thus, Simple Interest = $900
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 = $3600 + $900
= $4500
Thus, Amount to be paid = $4500 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 = $3600
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3600 + ($3600 × 5% × 5)
= $3600 + ($3600 ×5/100 × 5)
= $3600 + (3600 × 5 × 5/100)
= $3600 + (18000 × 5/100)
= $3600 + (90000/100)
= $3600 + $900 = $4500
Thus, Amount (A) to be paid = $4500 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 $3600, the simple interest in 1 year
= 5/100 × 3600
= 5 × 3600/100
= 18000/100 = $180
Thus, simple interest for 1 year = $180
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $180 × 5 = $900
Thus, Simple Interest (SI) = $900
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $900
= $4500
Thus, Amount to be paid = $4500 Answer
Similar Questions
(1) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.
(2) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 9% simple interest?
(3) If Mary borrowed $3050 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(4) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.
(5) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 3% simple interest for 7 years.
(7) Anthony had to pay $4816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) What amount does James have to pay after 5 years if he takes a loan of $3000 at 4% simple interest?
(9) If Jessica borrowed $3750 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 6% simple interest?