Question:
What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 7% simple interest?
Correct Answer
$4522.5
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 7%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3350 × 7% × 5
= $3350 ×7/100 × 5
= 3350 × 7 × 5/100
= 23450 × 5/100
= 117250/100
= $1172.5
Thus, Simple Interest = $1172.5
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 = $3350 + $1172.5
= $4522.5
Thus, Amount to be paid = $4522.5 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 = $3350
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 5 years
Thus, Amount (A)
= $3350 + ($3350 × 7% × 5)
= $3350 + ($3350 ×7/100 × 5)
= $3350 + (3350 × 7 × 5/100)
= $3350 + (23450 × 5/100)
= $3350 + (117250/100)
= $3350 + $1172.5 = $4522.5
Thus, Amount (A) to be paid = $4522.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3350, the simple interest in 1 year
= 7/100 × 3350
= 7 × 3350/100
= 23450/100 = $234.5
Thus, simple interest for 1 year = $234.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $234.5 × 5 = $1172.5
Thus, Simple Interest (SI) = $1172.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1172.5
= $4522.5
Thus, Amount to be paid = $4522.5 Answer
Similar Questions
(1) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(3) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(4) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 3% simple interest?
(5) 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.
(6) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 2% simple interest?
(7) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(8) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 8 years.
(10) If Susan paid $3942 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.