Question:
What amount does James have to pay after 5 years if he takes a loan of $3000 at 6% simple interest?
Correct Answer
$3900
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 6%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $3000 × 6% × 5
= $3000 ×6/100 × 5
= 3000 × 6 × 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 = $3000 + $900
= $3900
Thus, Amount to be paid = $3900 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 = $3000
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3000 + ($3000 × 6% × 5)
= $3000 + ($3000 ×6/100 × 5)
= $3000 + (3000 × 6 × 5/100)
= $3000 + (18000 × 5/100)
= $3000 + (90000/100)
= $3000 + $900 = $3900
Thus, Amount (A) to be paid = $3900 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3000, the simple interest in 1 year
= 6/100 × 3000
= 6 × 3000/100
= 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 = $3000 + $900
= $3900
Thus, Amount to be paid = $3900 Answer
Similar Questions
(1) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.
(2) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(3) Patricia had to pay $3339 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 8 years.
(6) In how much time a principal of $3100 will amount to $3379 at a simple interest of 3% per annum?
(7) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.
(9) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 4 years.