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) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7602 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 8 years.
(3) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(5) What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?
(6) What amount does William have to pay after 6 years if he takes a loan of $3500 at 5% simple interest?
(7) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(8) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 5% simple interest?
(9) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
(10) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.