Question:
What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 5% simple interest?
Correct Answer
$4562.5
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 5% × 5
= $3650 ×5/100 × 5
= 3650 × 5 × 5/100
= 18250 × 5/100
= 91250/100
= $912.5
Thus, Simple Interest = $912.5
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 = $3650 + $912.5
= $4562.5
Thus, Amount to be paid = $4562.5 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 = $3650
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3650 + ($3650 × 5% × 5)
= $3650 + ($3650 ×5/100 × 5)
= $3650 + (3650 × 5 × 5/100)
= $3650 + (18250 × 5/100)
= $3650 + (91250/100)
= $3650 + $912.5 = $4562.5
Thus, Amount (A) to be paid = $4562.5 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 $3650, the simple interest in 1 year
= 5/100 × 3650
= 5 × 3650/100
= 18250/100 = $182.5
Thus, simple interest for 1 year = $182.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $182.5 × 5 = $912.5
Thus, Simple Interest (SI) = $912.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $912.5
= $4562.5
Thus, Amount to be paid = $4562.5 Answer
Similar Questions
(1) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 10% simple interest?
(2) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 8 years.
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 7 years.
(4) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(6) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.
(7) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(8) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.
(9) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(10) How much loan did James borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6000 to clear it?