Question:
What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 8% simple interest?
Correct Answer
$4340
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 8% × 5
= $3100 ×8/100 × 5
= 3100 × 8 × 5/100
= 24800 × 5/100
= 124000/100
= $1240
Thus, Simple Interest = $1240
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 + $1240
= $4340
Thus, Amount to be paid = $4340 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) = 8%
And, Time (t) = 5 years
Thus, Amount (A)
= $3100 + ($3100 × 8% × 5)
= $3100 + ($3100 ×8/100 × 5)
= $3100 + (3100 × 8 × 5/100)
= $3100 + (24800 × 5/100)
= $3100 + (124000/100)
= $3100 + $1240 = $4340
Thus, Amount (A) to be paid = $4340 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 $3100, the simple interest in 1 year
= 8/100 × 3100
= 8 × 3100/100
= 24800/100 = $248
Thus, simple interest for 1 year = $248
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $248 × 5 = $1240
Thus, Simple Interest (SI) = $1240
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $1240
= $4340
Thus, Amount to be paid = $4340 Answer
Similar Questions
(1) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(2) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(3) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(4) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.
(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 4% simple interest?
(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.
(7) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 7% simple interest for 7 years.
(9) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(10) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8145 to clear the loan, then find the time period of the loan.