Question:
What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 4% simple interest?
Correct Answer
$4380
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 4% × 5
= $3650 ×4/100 × 5
= 3650 × 4 × 5/100
= 14600 × 5/100
= 73000/100
= $730
Thus, Simple Interest = $730
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 + $730
= $4380
Thus, Amount to be paid = $4380 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) = 4%
And, Time (t) = 5 years
Thus, Amount (A)
= $3650 + ($3650 × 4% × 5)
= $3650 + ($3650 ×4/100 × 5)
= $3650 + (3650 × 4 × 5/100)
= $3650 + (14600 × 5/100)
= $3650 + (73000/100)
= $3650 + $730 = $4380
Thus, Amount (A) to be paid = $4380 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 $3650, the simple interest in 1 year
= 4/100 × 3650
= 4 × 3650/100
= 14600/100 = $146
Thus, simple interest for 1 year = $146
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $146 × 5 = $730
Thus, Simple Interest (SI) = $730
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $730
= $4380
Thus, Amount to be paid = $4380 Answer
Similar Questions
(1) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 4 years.
(2) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 7% simple interest for 7 years.
(3) 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.
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?
(5) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if John borrowed a sum of $3100 at a 7% simple interest?
(7) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?
(9) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 4 years.