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) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?
(2) How much loan did Robert borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5865 to clear it?
(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 8 years.
(4) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 6% simple interest?
(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.
(6) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.
(7) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 8% simple interest?
(8) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 8 years.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.
(10) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.