Question:
What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 6% simple interest?
Correct Answer
$4745
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 6% × 5
= $3650 ×6/100 × 5
= 3650 × 6 × 5/100
= 21900 × 5/100
= 109500/100
= $1095
Thus, Simple Interest = $1095
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 + $1095
= $4745
Thus, Amount to be paid = $4745 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) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3650 + ($3650 × 6% × 5)
= $3650 + ($3650 ×6/100 × 5)
= $3650 + (3650 × 6 × 5/100)
= $3650 + (21900 × 5/100)
= $3650 + (109500/100)
= $3650 + $1095 = $4745
Thus, Amount (A) to be paid = $4745 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 $3650, the simple interest in 1 year
= 6/100 × 3650
= 6 × 3650/100
= 21900/100 = $219
Thus, simple interest for 1 year = $219
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $219 × 5 = $1095
Thus, Simple Interest (SI) = $1095
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $1095
= $4745
Thus, Amount to be paid = $4745 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(3) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.
(5) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) John had to pay $3392 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.
(8) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.
(10) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.