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) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 2% simple interest?
(2) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(4) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
(5) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 8 years.
(7) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(9) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(10) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 6% simple interest?