Question:
What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?
Correct Answer
$4800
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 10% × 5
= $3200 ×10/100 × 5
= 3200 × 10 × 5/100
= 32000 × 5/100
= 160000/100
= $1600
Thus, Simple Interest = $1600
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 = $3200 + $1600
= $4800
Thus, Amount to be paid = $4800 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 = $3200
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3200 + ($3200 × 10% × 5)
= $3200 + ($3200 ×10/100 × 5)
= $3200 + (3200 × 10 × 5/100)
= $3200 + (32000 × 5/100)
= $3200 + (160000/100)
= $3200 + $1600 = $4800
Thus, Amount (A) to be paid = $4800 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 $3200, the simple interest in 1 year
= 10/100 × 3200
= 10 × 3200/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $320 × 5 = $1600
Thus, Simple Interest (SI) = $1600
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1600
= $4800
Thus, Amount to be paid = $4800 Answer
Similar Questions
(1) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 3 years.
(3) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 2% simple interest?
(4) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 9% simple interest?
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.
(6) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 8 years.
(7) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.
(8) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6407 to clear the loan, then find the time period of the loan.
(9) Anthony had to pay $4945 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.