Question:
What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?
Correct Answer
$3965
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 6% × 5
= $3050 ×6/100 × 5
= 3050 × 6 × 5/100
= 18300 × 5/100
= 91500/100
= $915
Thus, Simple Interest = $915
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 = $3050 + $915
= $3965
Thus, Amount to be paid = $3965 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 = $3050
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3050 + ($3050 × 6% × 5)
= $3050 + ($3050 ×6/100 × 5)
= $3050 + (3050 × 6 × 5/100)
= $3050 + (18300 × 5/100)
= $3050 + (91500/100)
= $3050 + $915 = $3965
Thus, Amount (A) to be paid = $3965 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 $3050, the simple interest in 1 year
= 6/100 × 3050
= 6 × 3050/100
= 18300/100 = $183
Thus, simple interest for 1 year = $183
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $183 × 5 = $915
Thus, Simple Interest (SI) = $915
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $915
= $3965
Thus, Amount to be paid = $3965 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 7 years.
(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 8 years.
(3) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.
(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 9% simple interest for 4 years.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 8 years.
(6) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(7) 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?
(8) Sarah had to pay $4196.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 7 years.
(10) How much loan did Richard borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7000 to clear it?