Question:
What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?
Correct Answer
$4185
Solution And Explanation
Solution
Given,
Principal (P) = $3100
Rate of Simple Interest (SI) = 7%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 5
= $3100 ×7/100 × 5
= 3100 × 7 × 5/100
= 21700 × 5/100
= 108500/100
= $1085
Thus, Simple Interest = $1085
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 + $1085
= $4185
Thus, Amount to be paid = $4185 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) = 7%
And, Time (t) = 5 years
Thus, Amount (A)
= $3100 + ($3100 × 7% × 5)
= $3100 + ($3100 ×7/100 × 5)
= $3100 + (3100 × 7 × 5/100)
= $3100 + (21700 × 5/100)
= $3100 + (108500/100)
= $3100 + $1085 = $4185
Thus, Amount (A) to be paid = $4185 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3100, the simple interest in 1 year
= 7/100 × 3100
= 7 × 3100/100
= 21700/100 = $217
Thus, simple interest for 1 year = $217
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $217 × 5 = $1085
Thus, Simple Interest (SI) = $1085
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $1085
= $4185
Thus, Amount to be paid = $4185 Answer
Similar Questions
(1) If Mark paid $5104 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.
(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 4 years.
(4) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(5) If Kimberly paid $5208 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(7) How much loan did Mary borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6312.5 to clear it?
(8) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(9) William had to pay $4025 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.