Question:
What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 5% simple interest?
Correct Answer
$4437.5
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 5% × 5
= $3550 ×5/100 × 5
= 3550 × 5 × 5/100
= 17750 × 5/100
= 88750/100
= $887.5
Thus, Simple Interest = $887.5
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 = $3550 + $887.5
= $4437.5
Thus, Amount to be paid = $4437.5 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 = $3550
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3550 + ($3550 × 5% × 5)
= $3550 + ($3550 ×5/100 × 5)
= $3550 + (3550 × 5 × 5/100)
= $3550 + (17750 × 5/100)
= $3550 + (88750/100)
= $3550 + $887.5 = $4437.5
Thus, Amount (A) to be paid = $4437.5 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 $3550, the simple interest in 1 year
= 5/100 × 3550
= 5 × 3550/100
= 17750/100 = $177.5
Thus, simple interest for 1 year = $177.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $177.5 × 5 = $887.5
Thus, Simple Interest (SI) = $887.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $887.5
= $4437.5
Thus, Amount to be paid = $4437.5 Answer
Similar Questions
(1) How much loan did Emily borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7425 to clear it?
(2) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 6% simple interest?
(4) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(6) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 8% simple interest.
(7) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 3% simple interest.
(8) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(9) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?
(10) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.