Question:
What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?
Correct Answer
$4500
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 10%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 5
= $3000 ×10/100 × 5
= 3000 × 10 × 5/100
= 30000 × 5/100
= 150000/100
= $1500
Thus, Simple Interest = $1500
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 + $1500
= $4500
Thus, Amount to be paid = $4500 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) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3000 + ($3000 × 10% × 5)
= $3000 + ($3000 ×10/100 × 5)
= $3000 + (3000 × 10 × 5/100)
= $3000 + (30000 × 5/100)
= $3000 + (150000/100)
= $3000 + $1500 = $4500
Thus, Amount (A) to be paid = $4500 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3000, the simple interest in 1 year
= 10/100 × 3000
= 10 × 3000/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $300 × 5 = $1500
Thus, Simple Interest (SI) = $1500
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $1500
= $4500
Thus, Amount to be paid = $4500 Answer
Similar Questions
(1) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(3) What amount does John have to pay after 5 years if he takes a loan of $3200 at 8% simple interest?
(4) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 7 years.
(5) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 7 years.
(7) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $9856 to clear the loan, then find the time period of the loan.
(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 4 years.
(10) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.