Question:
What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 2% simple interest?
Correct Answer
$3685
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 2%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 5
= $3350 ×2/100 × 5
= 3350 × 2 × 5/100
= 6700 × 5/100
= 33500/100
= $335
Thus, Simple Interest = $335
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 + $335
= $3685
Thus, Amount to be paid = $3685 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) = 2%
And, Time (t) = 5 years
Thus, Amount (A)
= $3350 + ($3350 × 2% × 5)
= $3350 + ($3350 ×2/100 × 5)
= $3350 + (3350 × 2 × 5/100)
= $3350 + (6700 × 5/100)
= $3350 + (33500/100)
= $3350 + $335 = $3685
Thus, Amount (A) to be paid = $3685 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3350, the simple interest in 1 year
= 2/100 × 3350
= 2 × 3350/100
= 6700/100 = $67
Thus, simple interest for 1 year = $67
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $67 × 5 = $335
Thus, Simple Interest (SI) = $335
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $335
= $3685
Thus, Amount to be paid = $3685 Answer
Similar Questions
(1) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(2) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.
(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 6% simple interest?
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 7% simple interest for 8 years.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 8 years.
(6) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8436 to clear the loan, then find the time period of the loan.
(7) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(8) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $8036 to clear the loan, then find the time period of the loan.
(9) If Richard paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.