Question:
What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 10% simple interest?
Correct Answer
$5400
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 10% × 5
= $3600 ×10/100 × 5
= 3600 × 10 × 5/100
= 36000 × 5/100
= 180000/100
= $1800
Thus, Simple Interest = $1800
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 = $3600 + $1800
= $5400
Thus, Amount to be paid = $5400 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 = $3600
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3600 + ($3600 × 10% × 5)
= $3600 + ($3600 ×10/100 × 5)
= $3600 + (3600 × 10 × 5/100)
= $3600 + (36000 × 5/100)
= $3600 + (180000/100)
= $3600 + $1800 = $5400
Thus, Amount (A) to be paid = $5400 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 $3600, the simple interest in 1 year
= 10/100 × 3600
= 10 × 3600/100
= 36000/100 = $360
Thus, simple interest for 1 year = $360
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $360 × 5 = $1800
Thus, Simple Interest (SI) = $1800
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1800
= $5400
Thus, Amount to be paid = $5400 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(2) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 7 years.
(4) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 9% simple interest?
(6) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 8% simple interest?
(7) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(8) If William paid $4060 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) How much loan did Sharon borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9300 to clear it?
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 7 years.