Question:
What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 8% simple interest?
Correct Answer
$4270
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 8%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 5
= $3050 ×8/100 × 5
= 3050 × 8 × 5/100
= 24400 × 5/100
= 122000/100
= $1220
Thus, Simple Interest = $1220
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 + $1220
= $4270
Thus, Amount to be paid = $4270 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) = 8%
And, Time (t) = 5 years
Thus, Amount (A)
= $3050 + ($3050 × 8% × 5)
= $3050 + ($3050 ×8/100 × 5)
= $3050 + (3050 × 8 × 5/100)
= $3050 + (24400 × 5/100)
= $3050 + (122000/100)
= $3050 + $1220 = $4270
Thus, Amount (A) to be paid = $4270 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3050, the simple interest in 1 year
= 8/100 × 3050
= 8 × 3050/100
= 24400/100 = $244
Thus, simple interest for 1 year = $244
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $244 × 5 = $1220
Thus, Simple Interest (SI) = $1220
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $1220
= $4270
Thus, Amount to be paid = $4270 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(2) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 4 years.
(3) If Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) How much loan did Edward borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9120 to clear it?
(5) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 4 years.
(7) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 8 years.
(8) How much loan did Jacob borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9200 to clear it?
(9) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Karen had to pay $4424 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.