Question:
Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.
Correct Answer
$3852.5
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 5%
Time (t) = 3 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) = $3350 × 5% × 3
= $3350 ×5/100 × 3
= 3350 × 5 × 3/100
= 16750 × 3/100
= 50250/100
= $502.5
Thus, Simple Interest = $502.5
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 = $3350 + $502.5
= $3852.5
Thus, Amount to be paid = $3852.5 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 = $3350
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3350 + ($3350 × 5% × 3)
= $3350 + ($3350 ×5/100 × 3)
= $3350 + (3350 × 5 × 3/100)
= $3350 + (16750 × 3/100)
= $3350 + (50250/100)
= $3350 + $502.5 = $3852.5
Thus, Amount (A) to be paid = $3852.5 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 $3350, the simple interest in 1 year
= 5/100 × 3350
= 5 × 3350/100
= 16750/100 = $167.5
Thus, simple interest for 1 year = $167.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $167.5 × 3 = $502.5
Thus, Simple Interest (SI) = $502.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $502.5
= $3852.5
Thus, Amount to be paid = $3852.5 Answer
Similar Questions
(1) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7009 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 2% simple interest for 7 years.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 4 years.
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 3 years.
(5) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 9% simple interest.
(7) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?
(8) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 8 years.
(9) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(10) What amount does John have to pay after 5 years if he takes a loan of $3200 at 4% simple interest?