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) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(2) If Thomas paid $4256 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.
(4) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(5) Charles had to pay $4485 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(7) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 7% simple interest.
(9) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $10140 to clear the loan, then find the time period of the loan.
(10) What amount does John have to pay after 6 years if he takes a loan of $3200 at 8% simple interest?