Question:
What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 5% simple interest?
Correct Answer
$4750
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 5% × 5
= $3800 ×5/100 × 5
= 3800 × 5 × 5/100
= 19000 × 5/100
= 95000/100
= $950
Thus, Simple Interest = $950
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 = $3800 + $950
= $4750
Thus, Amount to be paid = $4750 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 = $3800
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3800 + ($3800 × 5% × 5)
= $3800 + ($3800 ×5/100 × 5)
= $3800 + (3800 × 5 × 5/100)
= $3800 + (19000 × 5/100)
= $3800 + (95000/100)
= $3800 + $950 = $4750
Thus, Amount (A) to be paid = $4750 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 $3800, the simple interest in 1 year
= 5/100 × 3800
= 5 × 3800/100
= 19000/100 = $190
Thus, simple interest for 1 year = $190
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $190 × 5 = $950
Thus, Simple Interest (SI) = $950
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $950
= $4750
Thus, Amount to be paid = $4750 Answer
Similar Questions
(1) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 7 years.
(2) Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 3 years.
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 4 years.
(4) How much loan did Karen borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7437.5 to clear it?
(5) Michael had to pay $3597 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(8) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 5% simple interest?
(9) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?
(10) 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?