Question:
What amount does James have to pay after 6 years if he takes a loan of $3000 at 10% simple interest?
Correct Answer
$4800
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 10%
Time (t) = 6 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) = $3000 × 10% × 6
= $3000 ×10/100 × 6
= 3000 × 10 × 6/100
= 30000 × 6/100
= 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 = $3000 + $1800
= $4800
Thus, Amount to be paid = $4800 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) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3000 + ($3000 × 10% × 6)
= $3000 + ($3000 ×10/100 × 6)
= $3000 + (3000 × 10 × 6/100)
= $3000 + (30000 × 6/100)
= $3000 + (180000/100)
= $3000 + $1800 = $4800
Thus, Amount (A) to be paid = $4800 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 $3000, the simple interest in 1 year
= 10/100 × 3000
= 10 × 3000/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $300 × 6 = $1800
Thus, Simple Interest (SI) = $1800
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $1800
= $4800
Thus, Amount to be paid = $4800 Answer
Similar Questions
(1) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 8% simple interest?
(2) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.
(3) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 8 years.
(5) How much loan did Amanda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8222.5 to clear it?
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.
(7) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.
(8) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 3% simple interest?
(9) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
(10) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.