Question:
What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 8% simple interest?
Correct Answer
$4690
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 8%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 5
= $3350 ×8/100 × 5
= 3350 × 8 × 5/100
= 26800 × 5/100
= 134000/100
= $1340
Thus, Simple Interest = $1340
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 + $1340
= $4690
Thus, Amount to be paid = $4690 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) = 8%
And, Time (t) = 5 years
Thus, Amount (A)
= $3350 + ($3350 × 8% × 5)
= $3350 + ($3350 ×8/100 × 5)
= $3350 + (3350 × 8 × 5/100)
= $3350 + (26800 × 5/100)
= $3350 + (134000/100)
= $3350 + $1340 = $4690
Thus, Amount (A) to be paid = $4690 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3350, the simple interest in 1 year
= 8/100 × 3350
= 8 × 3350/100
= 26800/100 = $268
Thus, simple interest for 1 year = $268
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $268 × 5 = $1340
Thus, Simple Interest (SI) = $1340
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1340
= $4690
Thus, Amount to be paid = $4690 Answer
Similar Questions
(1) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 3 years.
(3) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?
(4) How much loan did Linda borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6687.5 to clear it?
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 5% simple interest?
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 4 years.
(7) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $9760 to clear the loan, then find the time period of the loan.
(8) Barbara had to pay $4082.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3000 will amount to $3240 at a simple interest of 4% per annum?