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) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 5% simple interest?
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 3 years.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 6% simple interest for 8 years.
(4) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(5) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 5% simple interest?
(7) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.
(9) If Daniel paid $4756 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 7 years.