Question:
What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 2% simple interest?
Correct Answer
$3905
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 2% × 5
= $3550 ×2/100 × 5
= 3550 × 2 × 5/100
= 7100 × 5/100
= 35500/100
= $355
Thus, Simple Interest = $355
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 = $3550 + $355
= $3905
Thus, Amount to be paid = $3905 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 = $3550
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 5 years
Thus, Amount (A)
= $3550 + ($3550 × 2% × 5)
= $3550 + ($3550 ×2/100 × 5)
= $3550 + (3550 × 2 × 5/100)
= $3550 + (7100 × 5/100)
= $3550 + (35500/100)
= $3550 + $355 = $3905
Thus, Amount (A) to be paid = $3905 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 $3550, the simple interest in 1 year
= 2/100 × 3550
= 2 × 3550/100
= 7100/100 = $71
Thus, simple interest for 1 year = $71
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $71 × 5 = $355
Thus, Simple Interest (SI) = $355
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $355
= $3905
Thus, Amount to be paid = $3905 Answer
Similar Questions
(1) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 8 years.
(3) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $10496 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(6) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 8 years.
(9) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 10% simple interest?
(10) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.