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) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11222 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 4 years.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
(4) Mark had to pay $4928 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 7% simple interest?
(6) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 7% simple interest.
(7) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(8) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $8932 to clear the loan, then find the time period of the loan.
(9) What amount does David have to pay after 6 years if he takes a loan of $3400 at 10% simple interest?
(10) How much loan did Steven borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7590 to clear it?