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) How much loan did Mary borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5807.5 to clear it?
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 3% simple interest?
(3) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(4) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $9617 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 5% simple interest?
(6) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if John borrowed a sum of $3100 at a 7% simple interest?
(8) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $13200 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(10) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?