Question:
What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
Correct Answer
$4015
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 2% × 5
= $3650 ×2/100 × 5
= 3650 × 2 × 5/100
= 7300 × 5/100
= 36500/100
= $365
Thus, Simple Interest = $365
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 = $3650 + $365
= $4015
Thus, Amount to be paid = $4015 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 = $3650
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 5 years
Thus, Amount (A)
= $3650 + ($3650 × 2% × 5)
= $3650 + ($3650 ×2/100 × 5)
= $3650 + (3650 × 2 × 5/100)
= $3650 + (7300 × 5/100)
= $3650 + (36500/100)
= $3650 + $365 = $4015
Thus, Amount (A) to be paid = $4015 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 $3650, the simple interest in 1 year
= 2/100 × 3650
= 2 × 3650/100
= 7300/100 = $73
Thus, simple interest for 1 year = $73
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $73 × 5 = $365
Thus, Simple Interest (SI) = $365
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $365
= $4015
Thus, Amount to be paid = $4015 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $11000 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 3 years.
(3) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?
(4) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(5) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 7% simple interest for 4 years.
(7) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.
(8) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8584 to clear the loan, then find the time period of the loan.
(9) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(10) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 8% simple interest?