Question:
What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
Correct Answer
$5510
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 9% × 5
= $3800 ×9/100 × 5
= 3800 × 9 × 5/100
= 34200 × 5/100
= 171000/100
= $1710
Thus, Simple Interest = $1710
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 = $3800 + $1710
= $5510
Thus, Amount to be paid = $5510 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 = $3800
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3800 + ($3800 × 9% × 5)
= $3800 + ($3800 ×9/100 × 5)
= $3800 + (3800 × 9 × 5/100)
= $3800 + (34200 × 5/100)
= $3800 + (171000/100)
= $3800 + $1710 = $5510
Thus, Amount (A) to be paid = $5510 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 $3800, the simple interest in 1 year
= 9/100 × 3800
= 9 × 3800/100
= 34200/100 = $342
Thus, simple interest for 1 year = $342
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $342 × 5 = $1710
Thus, Simple Interest (SI) = $1710
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1710
= $5510
Thus, Amount to be paid = $5510 Answer
Similar Questions
(1) How much loan did Sharon borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9687.5 to clear it?
(2) What amount does William have to pay after 6 years if he takes a loan of $3500 at 10% simple interest?
(3) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 3 years.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 3 years.
(6) If Thomas paid $4408 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 3 years.
(8) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 7 years.
(10) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 9% simple interest?