Question:
What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 10% simple interest?
Correct Answer
$5700
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 10% × 5
= $3800 ×10/100 × 5
= 3800 × 10 × 5/100
= 38000 × 5/100
= 190000/100
= $1900
Thus, Simple Interest = $1900
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 = $3800 + $1900
= $5700
Thus, Amount to be paid = $5700 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 = $3800
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3800 + ($3800 × 10% × 5)
= $3800 + ($3800 ×10/100 × 5)
= $3800 + (3800 × 10 × 5/100)
= $3800 + (38000 × 5/100)
= $3800 + (190000/100)
= $3800 + $1900 = $5700
Thus, Amount (A) to be paid = $5700 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 $3800, the simple interest in 1 year
= 10/100 × 3800
= 10 × 3800/100
= 38000/100 = $380
Thus, simple interest for 1 year = $380
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $380 × 5 = $1900
Thus, Simple Interest (SI) = $1900
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1900
= $5700
Thus, Amount to be paid = $5700 Answer
Similar Questions
(1) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 10% simple interest?
(2) If Karen paid $4424 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?
(4) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 7 years.
(5) If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 8 years.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 8 years.
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(10) Matthew had to pay $4452 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.