Question:
What amount does James have to pay after 5 years if he takes a loan of $3000 at 9% simple interest?
Correct Answer
$4350
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 9%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3000 × 9% × 5
= $3000 ×9/100 × 5
= 3000 × 9 × 5/100
= 27000 × 5/100
= 135000/100
= $1350
Thus, Simple Interest = $1350
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 = $3000 + $1350
= $4350
Thus, Amount to be paid = $4350 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 = $3000
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3000 + ($3000 × 9% × 5)
= $3000 + ($3000 ×9/100 × 5)
= $3000 + (3000 × 9 × 5/100)
= $3000 + (27000 × 5/100)
= $3000 + (135000/100)
= $3000 + $1350 = $4350
Thus, Amount (A) to be paid = $4350 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3000, the simple interest in 1 year
= 9/100 × 3000
= 9 × 3000/100
= 27000/100 = $270
Thus, simple interest for 1 year = $270
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $270 × 5 = $1350
Thus, Simple Interest (SI) = $1350
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $1350
= $4350
Thus, Amount to be paid = $4350 Answer
Similar Questions
(1) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(2) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.
(3) Daniel had to pay $4346 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 7% simple interest?
(5) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(6) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 9% simple interest?
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 3 years.
(9) Kimberly had to pay $5208 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 3% simple interest?