Question:
What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 7% simple interest?
Correct Answer
$4927.5
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 7% × 5
= $3650 ×7/100 × 5
= 3650 × 7 × 5/100
= 25550 × 5/100
= 127750/100
= $1277.5
Thus, Simple Interest = $1277.5
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 = $3650 + $1277.5
= $4927.5
Thus, Amount to be paid = $4927.5 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 = $3650
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 5 years
Thus, Amount (A)
= $3650 + ($3650 × 7% × 5)
= $3650 + ($3650 ×7/100 × 5)
= $3650 + (3650 × 7 × 5/100)
= $3650 + (25550 × 5/100)
= $3650 + (127750/100)
= $3650 + $1277.5 = $4927.5
Thus, Amount (A) to be paid = $4927.5 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 $3650, the simple interest in 1 year
= 7/100 × 3650
= 7 × 3650/100
= 25550/100 = $255.5
Thus, simple interest for 1 year = $255.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $255.5 × 5 = $1277.5
Thus, Simple Interest (SI) = $1277.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $1277.5
= $4927.5
Thus, Amount to be paid = $4927.5 Answer
Similar Questions
(1) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 9% simple interest?
(2) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 7 years.
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 6% simple interest for 7 years.
(4) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 3 years.
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 4 years.
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 3 years.
(8) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 5% simple interest.
(9) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 10% simple interest?
(10) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8856 to clear the loan, then find the time period of the loan.