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) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.
(2) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.
(4) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(5) If David paid $4080 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) If Patricia borrowed $3150 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 8% simple interest for 8 years.
(8) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(9) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(10) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.