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) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8432 to clear the loan, then find the time period of the loan.
(2) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 9% simple interest?
(4) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 3 years.
(6) Karen had to pay $4424 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(8) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?
(9) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.