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) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(2) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(3) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 9% simple interest?
(4) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 2% simple interest?
(5) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $11040 to clear the loan, then find the time period of the loan.
(6) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(7) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(8) Thomas had to pay $4142 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) If Kimberly paid $5022 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) If Christopher paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.