Question:
What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?
Correct Answer
$5110
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 8% × 5
= $3650 ×8/100 × 5
= 3650 × 8 × 5/100
= 29200 × 5/100
= 146000/100
= $1460
Thus, Simple Interest = $1460
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 = $3650 + $1460
= $5110
Thus, Amount to be paid = $5110 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 = $3650
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 5 years
Thus, Amount (A)
= $3650 + ($3650 × 8% × 5)
= $3650 + ($3650 ×8/100 × 5)
= $3650 + (3650 × 8 × 5/100)
= $3650 + (29200 × 5/100)
= $3650 + (146000/100)
= $3650 + $1460 = $5110
Thus, Amount (A) to be paid = $5110 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 $3650, the simple interest in 1 year
= 8/100 × 3650
= 8 × 3650/100
= 29200/100 = $292
Thus, simple interest for 1 year = $292
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $292 × 5 = $1460
Thus, Simple Interest (SI) = $1460
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $1460
= $5110
Thus, Amount to be paid = $5110 Answer
Similar Questions
(1) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 3 years.
(3) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(4) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.
(5) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7980 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 7 years.
(7) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(8) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?
(9) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $10370 to clear the loan, then find the time period of the loan.
(10) If Betty paid $5100 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.