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) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 8 years.
(3) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.
(4) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10830 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.
(6) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?
(7) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 10% simple interest.
(8) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 3% simple interest.
(9) In how much time a principal of $3100 will amount to $3720 at a simple interest of 4% per annum?
(10) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.