Question:
What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 3% simple interest?
Correct Answer
$4197.5
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 3% × 5
= $3650 ×3/100 × 5
= 3650 × 3 × 5/100
= 10950 × 5/100
= 54750/100
= $547.5
Thus, Simple Interest = $547.5
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 = $3650 + $547.5
= $4197.5
Thus, Amount to be paid = $4197.5 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 = $3650
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3650 + ($3650 × 3% × 5)
= $3650 + ($3650 ×3/100 × 5)
= $3650 + (3650 × 3 × 5/100)
= $3650 + (10950 × 5/100)
= $3650 + (54750/100)
= $3650 + $547.5 = $4197.5
Thus, Amount (A) to be paid = $4197.5 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 $3650, the simple interest in 1 year
= 3/100 × 3650
= 3 × 3650/100
= 10950/100 = $109.5
Thus, simple interest for 1 year = $109.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $109.5 × 5 = $547.5
Thus, Simple Interest (SI) = $547.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $547.5
= $4197.5
Thus, Amount to be paid = $4197.5 Answer
Similar Questions
(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 3 years.
(2) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.
(3) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 3% per annum?
(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(5) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 5% simple interest?
(6) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 3 years.
(7) Barbara had to pay $3763 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.
(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(10) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.