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) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 7 years.
(2) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(4) Jennifer had to pay $3737.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.
(7) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(8) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 9% simple interest?
(9) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 7 years.