Question:
What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 9% simple interest?
Correct Answer
$4422.5
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 9% × 5
= $3050 ×9/100 × 5
= 3050 × 9 × 5/100
= 27450 × 5/100
= 137250/100
= $1372.5
Thus, Simple Interest = $1372.5
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 + $1372.5
= $4422.5
Thus, Amount to be paid = $4422.5 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) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3050 + ($3050 × 9% × 5)
= $3050 + ($3050 ×9/100 × 5)
= $3050 + (3050 × 9 × 5/100)
= $3050 + (27450 × 5/100)
= $3050 + (137250/100)
= $3050 + $1372.5 = $4422.5
Thus, Amount (A) to be paid = $4422.5 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 $3050, the simple interest in 1 year
= 9/100 × 3050
= 9 × 3050/100
= 27450/100 = $274.5
Thus, simple interest for 1 year = $274.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $274.5 × 5 = $1372.5
Thus, Simple Interest (SI) = $1372.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $1372.5
= $4422.5
Thus, Amount to be paid = $4422.5 Answer
Similar Questions
(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 7 years.
(2) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(4) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 6% simple interest?
(5) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 8% simple interest?
(6) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.
(7) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(8) If Patricia paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 10% simple interest?
(10) How much loan did George borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8760 to clear it?