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) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.
(2) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(3) Nancy had to pay $4399 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(5) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 3 years.
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(8) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(9) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 3 years.