Question:
What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 6% simple interest?
Correct Answer
$4030
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 6% × 5
= $3100 ×6/100 × 5
= 3100 × 6 × 5/100
= 18600 × 5/100
= 93000/100
= $930
Thus, Simple Interest = $930
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 = $3100 + $930
= $4030
Thus, Amount to be paid = $4030 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 = $3100
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3100 + ($3100 × 6% × 5)
= $3100 + ($3100 ×6/100 × 5)
= $3100 + (3100 × 6 × 5/100)
= $3100 + (18600 × 5/100)
= $3100 + (93000/100)
= $3100 + $930 = $4030
Thus, Amount (A) to be paid = $4030 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 $3100, the simple interest in 1 year
= 6/100 × 3100
= 6 × 3100/100
= 18600/100 = $186
Thus, simple interest for 1 year = $186
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $186 × 5 = $930
Thus, Simple Interest (SI) = $930
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $930
= $4030
Thus, Amount to be paid = $4030 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(2) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.
(3) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 8% simple interest?
(4) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) How much loan did Thomas borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7250 to clear it?
(6) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 5% simple interest?
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 3 years.
(8) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 4 years.
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.