Question:
What amount does James have to pay after 6 years if he takes a loan of $3000 at 5% simple interest?
Correct Answer
$3900
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 5%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3000 × 5% × 6
= $3000 ×5/100 × 6
= 3000 × 5 × 6/100
= 15000 × 6/100
= 90000/100
= $900
Thus, Simple Interest = $900
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 = $3000 + $900
= $3900
Thus, Amount to be paid = $3900 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 = $3000
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3000 + ($3000 × 5% × 6)
= $3000 + ($3000 ×5/100 × 6)
= $3000 + (3000 × 5 × 6/100)
= $3000 + (15000 × 6/100)
= $3000 + (90000/100)
= $3000 + $900 = $3900
Thus, Amount (A) to be paid = $3900 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3000, the simple interest in 1 year
= 5/100 × 3000
= 5 × 3000/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $150 × 6 = $900
Thus, Simple Interest (SI) = $900
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $900
= $3900
Thus, Amount to be paid = $3900 Answer
Similar Questions
(1) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 9% simple interest?
(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 4 years.
(3) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.
(4) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 3 years.
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 4 years.
(7) If Kenneth paid $5800 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 8 years.
(9) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(10) In how much time a principal of $3050 will amount to $3233 at a simple interest of 2% per annum?