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) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) In how much time a principal of $3150 will amount to $3402 at a simple interest of 2% per annum?
(3) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 7 years.
(4) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(5) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 7 years.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 7 years.
(8) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 7 years.
(9) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(10) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?