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) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(2) How much loan did Michael borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6360 to clear it?
(3) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.
(5) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?
(6) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(7) What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?
(8) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 8% simple interest.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(10) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.