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) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(2) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 7% simple interest?
(3) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(4) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 3 years.
(6) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.
(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 7 years.
(8) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 10% simple interest.
(9) What amount does John have to pay after 5 years if he takes a loan of $3200 at 3% simple interest?
(10) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.