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 Joseph borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6555 to clear it?
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 3 years.
(4) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 8 years.
(6) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 6% simple interest?
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 3 years.
(8) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(9) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(10) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?