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) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(2) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.
(3) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 4% simple interest?
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 3 years.
(6) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.
(8) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(9) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 8 years.