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) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 5% simple interest?
(2) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(3) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
(4) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8791 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 7 years.
(7) Joseph had to pay $3922 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 7 years.
(10) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.