Question:
Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
Correct Answer
$6500
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 3%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $5000 × 3% × 10
= $5000 ×3/100 × 10
= 5000 × 3 × 10/100
= 15000 × 10/100
= 150000/100
= $1500
Thus, Simple Interest = $1500
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 = $5000 + $1500
= $6500
Thus, Amount to be paid = $6500 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 = $5000
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 10 years
Thus, Amount (A)
= $5000 + ($5000 × 3% × 10)
= $5000 + ($5000 ×3/100 × 10)
= $5000 + (5000 × 3 × 10/100)
= $5000 + (15000 × 10/100)
= $5000 + (150000/100)
= $5000 + $1500 = $6500
Thus, Amount (A) to be paid = $6500 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $5000, the simple interest in 1 year
= 3/100 × 5000
= 3 × 5000/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $150 × 10 = $1500
Thus, Simple Interest (SI) = $1500
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $1500
= $6500
Thus, Amount to be paid = $6500 Answer
Similar Questions
(1) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if David borrowed a sum of $5400 at 7% simple interest for 8 years.
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 3 years.
(5) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 4 years.
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 3 years.
(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 3% simple interest for 4 years.
(10) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 6% simple interest?