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) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?
(2) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 3 years.
(4) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(5) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 10% simple interest?
(6) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 7 years.
(7) If Karen paid $4266 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) How much loan did Michael borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6625 to clear it?
(9) How much loan did Barbara borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6660 to clear it?
(10) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.