Question:
What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 7% simple interest?
Correct Answer
$4792.5
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 7% × 5
= $3550 ×7/100 × 5
= 3550 × 7 × 5/100
= 24850 × 5/100
= 124250/100
= $1242.5
Thus, Simple Interest = $1242.5
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 = $3550 + $1242.5
= $4792.5
Thus, Amount to be paid = $4792.5 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 = $3550
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 5 years
Thus, Amount (A)
= $3550 + ($3550 × 7% × 5)
= $3550 + ($3550 ×7/100 × 5)
= $3550 + (3550 × 7 × 5/100)
= $3550 + (24850 × 5/100)
= $3550 + (124250/100)
= $3550 + $1242.5 = $4792.5
Thus, Amount (A) to be paid = $4792.5 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 $3550, the simple interest in 1 year
= 7/100 × 3550
= 7 × 3550/100
= 24850/100 = $248.5
Thus, simple interest for 1 year = $248.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $248.5 × 5 = $1242.5
Thus, Simple Interest (SI) = $1242.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1242.5
= $4792.5
Thus, Amount to be paid = $4792.5 Answer
Similar Questions
(1) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 7 years.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(3) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?
(4) Find the amount to be paid if Robert borrowed a sum of $5100 at 6% simple interest for 8 years.
(5) If John paid $3584 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 3 years.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 7 years.
(8) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(9) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(10) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.