Question:
What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
Correct Answer
$4187.5
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 5%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 5
= $3350 ×5/100 × 5
= 3350 × 5 × 5/100
= 16750 × 5/100
= 83750/100
= $837.5
Thus, Simple Interest = $837.5
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 = $3350 + $837.5
= $4187.5
Thus, Amount to be paid = $4187.5 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 = $3350
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3350 + ($3350 × 5% × 5)
= $3350 + ($3350 ×5/100 × 5)
= $3350 + (3350 × 5 × 5/100)
= $3350 + (16750 × 5/100)
= $3350 + (83750/100)
= $3350 + $837.5 = $4187.5
Thus, Amount (A) to be paid = $4187.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3350, the simple interest in 1 year
= 5/100 × 3350
= 5 × 3350/100
= 16750/100 = $167.5
Thus, simple interest for 1 year = $167.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $167.5 × 5 = $837.5
Thus, Simple Interest (SI) = $837.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $837.5
= $4187.5
Thus, Amount to be paid = $4187.5 Answer
Similar Questions
(1) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.
(2) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9937.5 to clear it?
(3) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 4 years.
(4) If Mark paid $4928 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 3% simple interest.
(7) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 6% simple interest.
(8) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(9) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(10) How much loan did Matthew borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6820 to clear it?