Question:
What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 10% simple interest?
Correct Answer
$4575
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 10% × 5
= $3050 ×10/100 × 5
= 3050 × 10 × 5/100
= 30500 × 5/100
= 152500/100
= $1525
Thus, Simple Interest = $1525
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 + $1525
= $4575
Thus, Amount to be paid = $4575 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) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3050 + ($3050 × 10% × 5)
= $3050 + ($3050 ×10/100 × 5)
= $3050 + (3050 × 10 × 5/100)
= $3050 + (30500 × 5/100)
= $3050 + (152500/100)
= $3050 + $1525 = $4575
Thus, Amount (A) to be paid = $4575 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 $3050, the simple interest in 1 year
= 10/100 × 3050
= 10 × 3050/100
= 30500/100 = $305
Thus, simple interest for 1 year = $305
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $305 × 5 = $1525
Thus, Simple Interest (SI) = $1525
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $1525
= $4575
Thus, Amount to be paid = $4575 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.
(2) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 4 years.
(5) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 4 years.
(6) If Christopher borrowed $4000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 8 years.
(8) What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?
(9) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 7 years.