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) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 7 years.
(2) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(4) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $9955 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(6) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.
(7) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 3 years.
(9) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(10) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.