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) If Andrew paid $5760 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?
(3) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?
(4) James had to pay $3360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) In how much time a principal of $3200 will amount to $3392 at a simple interest of 3% per annum?
(6) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 4% simple interest?
(7) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 4 years.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 7 years.
(10) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 8% simple interest?