Question:
What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 5% simple interest?
Correct Answer
$3965
Solution And Explanation
Solution
Given,
Principal (P) = $3050
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) = $3050 × 5% × 6
= $3050 ×5/100 × 6
= 3050 × 5 × 6/100
= 15250 × 6/100
= 91500/100
= $915
Thus, Simple Interest = $915
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 = $3050 + $915
= $3965
Thus, Amount to be paid = $3965 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 = $3050
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3050 + ($3050 × 5% × 6)
= $3050 + ($3050 ×5/100 × 6)
= $3050 + (3050 × 5 × 6/100)
= $3050 + (15250 × 6/100)
= $3050 + (91500/100)
= $3050 + $915 = $3965
Thus, Amount (A) to be paid = $3965 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 $3050, the simple interest in 1 year
= 5/100 × 3050
= 5 × 3050/100
= 15250/100 = $152.5
Thus, simple interest for 1 year = $152.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $152.5 × 6 = $915
Thus, Simple Interest (SI) = $915
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $915
= $3965
Thus, Amount to be paid = $3965 Answer
Similar Questions
(1) If James borrowed $3000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) How much loan did Ryan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9875 to clear it?
(3) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 5% simple interest?
(4) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 7 years.
(5) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 4 years.
(7) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?
(8) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 7 years.
(9) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(10) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?