Question:
What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 3% simple interest?
Correct Answer
$3852.5
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 3%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 5
= $3350 ×3/100 × 5
= 3350 × 3 × 5/100
= 10050 × 5/100
= 50250/100
= $502.5
Thus, Simple Interest = $502.5
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 + $502.5
= $3852.5
Thus, Amount to be paid = $3852.5 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) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3350 + ($3350 × 3% × 5)
= $3350 + ($3350 ×3/100 × 5)
= $3350 + (3350 × 3 × 5/100)
= $3350 + (10050 × 5/100)
= $3350 + (50250/100)
= $3350 + $502.5 = $3852.5
Thus, Amount (A) to be paid = $3852.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3350, the simple interest in 1 year
= 3/100 × 3350
= 3 × 3350/100
= 10050/100 = $100.5
Thus, simple interest for 1 year = $100.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $100.5 × 5 = $502.5
Thus, Simple Interest (SI) = $502.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $502.5
= $3852.5
Thus, Amount to be paid = $3852.5 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(2) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 8 years.
(4) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?
(5) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(6) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.
(8) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10360 to clear the loan, then find the time period of the loan.
(9) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 3 years.