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) How much loan did Andrew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8160 to clear it?
(2) In how much time a principal of $3000 will amount to $3270 at a simple interest of 3% per annum?
(3) In how much time a principal of $3100 will amount to $3224 at a simple interest of 2% per annum?
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 7 years.
(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 8 years.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 8 years.
(7) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(8) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(9) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(10) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 3% simple interest?