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) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(2) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.
(3) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $5848 to clear the loan, then find the time period of the loan.
(4) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?
(5) How much loan did Joshua borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8625 to clear it?
(6) What amount does William have to pay after 6 years if he takes a loan of $3500 at 7% simple interest?
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(8) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $9310 to clear the loan, then find the time period of the loan.
(9) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12800 to clear the loan, then find the time period of the loan.
(10) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.