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) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.
(2) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(4) If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?
(6) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 5% simple interest?
(7) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 6% simple interest?
(8) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 8 years.
(10) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9983 to clear the loan, then find the time period of the loan.