Question:
What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?
Correct Answer
$4020
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 4%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 5
= $3350 ×4/100 × 5
= 3350 × 4 × 5/100
= 13400 × 5/100
= 67000/100
= $670
Thus, Simple Interest = $670
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 + $670
= $4020
Thus, Amount to be paid = $4020 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) = 4%
And, Time (t) = 5 years
Thus, Amount (A)
= $3350 + ($3350 × 4% × 5)
= $3350 + ($3350 ×4/100 × 5)
= $3350 + (3350 × 4 × 5/100)
= $3350 + (13400 × 5/100)
= $3350 + (67000/100)
= $3350 + $670 = $4020
Thus, Amount (A) to be paid = $4020 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3350, the simple interest in 1 year
= 4/100 × 3350
= 4 × 3350/100
= 13400/100 = $134
Thus, simple interest for 1 year = $134
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $134 × 5 = $670
Thus, Simple Interest (SI) = $670
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $670
= $4020
Thus, Amount to be paid = $4020 Answer
Similar Questions
(1) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 8 years.
(2) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7820 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(5) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(7) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?
(8) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 8% simple interest.
(9) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 9% simple interest?
(10) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.