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) Find the amount to be paid if John borrowed a sum of $5200 at 3% simple interest for 7 years.
(2) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.
(4) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.
(5) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
(6) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.
(7) What amount will be due after 2 years if James borrowed a sum of $3000 at a 9% simple interest?
(8) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(9) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.