Question:
What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 8% simple interest?
Correct Answer
$4970
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 8% × 5
= $3550 ×8/100 × 5
= 3550 × 8 × 5/100
= 28400 × 5/100
= 142000/100
= $1420
Thus, Simple Interest = $1420
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 + $1420
= $4970
Thus, Amount to be paid = $4970 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) = 8%
And, Time (t) = 5 years
Thus, Amount (A)
= $3550 + ($3550 × 8% × 5)
= $3550 + ($3550 ×8/100 × 5)
= $3550 + (3550 × 8 × 5/100)
= $3550 + (28400 × 5/100)
= $3550 + (142000/100)
= $3550 + $1420 = $4970
Thus, Amount (A) to be paid = $4970 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 $3550, the simple interest in 1 year
= 8/100 × 3550
= 8 × 3550/100
= 28400/100 = $284
Thus, simple interest for 1 year = $284
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $284 × 5 = $1420
Thus, Simple Interest (SI) = $1420
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1420
= $4970
Thus, Amount to be paid = $4970 Answer
Similar Questions
(1) How much loan did Lisa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7260 to clear it?
(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(3) If Elizabeth paid $4002 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 4 years.
(6) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.
(9) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 9% simple interest?
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 3 years.