Question:
What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 6% simple interest?
Correct Answer
$4615
Solution And Explanation
Solution
Given,
Principal (P) = $3550
Rate of Simple Interest (SI) = 6%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 5
= $3550 ×6/100 × 5
= 3550 × 6 × 5/100
= 21300 × 5/100
= 106500/100
= $1065
Thus, Simple Interest = $1065
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 + $1065
= $4615
Thus, Amount to be paid = $4615 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) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3550 + ($3550 × 6% × 5)
= $3550 + ($3550 ×6/100 × 5)
= $3550 + (3550 × 6 × 5/100)
= $3550 + (21300 × 5/100)
= $3550 + (106500/100)
= $3550 + $1065 = $4615
Thus, Amount (A) to be paid = $4615 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3550, the simple interest in 1 year
= 6/100 × 3550
= 6 × 3550/100
= 21300/100 = $213
Thus, simple interest for 1 year = $213
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $213 × 5 = $1065
Thus, Simple Interest (SI) = $1065
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1065
= $4615
Thus, Amount to be paid = $4615 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(2) Susan had to pay $4197.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(4) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.
(5) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(6) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 7% simple interest.
(8) How much loan did Edward borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9500 to clear it?
(9) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?
(10) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.