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) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(2) How much loan did Charles borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7375 to clear it?
(3) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.
(4) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?
(5) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(6) If Anthony paid $4644 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.
(8) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 4% simple interest?
(9) If Thomas borrowed $3800 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.