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) How much loan did Mary borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6060 to clear it?
(2) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8892 to clear the loan, then find the time period of the loan.
(3) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(4) Michelle had to pay $5395.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) What amount does John have to pay after 6 years if he takes a loan of $3200 at 8% simple interest?
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.
(7) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.
(9) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.