Question:
What amount does William have to pay after 5 years if he takes a loan of $3500 at 10% simple interest?
Correct Answer
$5250
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 10% × 5
= $3500 ×10/100 × 5
= 3500 × 10 × 5/100
= 35000 × 5/100
= 175000/100
= $1750
Thus, Simple Interest = $1750
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 = $3500 + $1750
= $5250
Thus, Amount to be paid = $5250 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 = $3500
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3500 + ($3500 × 10% × 5)
= $3500 + ($3500 ×10/100 × 5)
= $3500 + (3500 × 10 × 5/100)
= $3500 + (35000 × 5/100)
= $3500 + (175000/100)
= $3500 + $1750 = $5250
Thus, Amount (A) to be paid = $5250 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 $3500, the simple interest in 1 year
= 10/100 × 3500
= 10 × 3500/100
= 35000/100 = $350
Thus, simple interest for 1 year = $350
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $350 × 5 = $1750
Thus, Simple Interest (SI) = $1750
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $1750
= $5250
Thus, Amount to be paid = $5250 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 4 years.
(3) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 5% simple interest?
(4) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 3% simple interest.
(5) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?
(6) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
(7) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 3 years.
(8) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 4 years.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(10) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 3 years.