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) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9230 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 4 years.
(3) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(4) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) If Robert paid $3472 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 Richard borrowed a sum of $3600 at 6% simple interest for 3 years.
(7) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 6% simple interest?
(8) Calculate the amount due if Patricia borrowed a sum of $3150 at 7% simple interest for 4 years.
(9) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 7 years.