Question:
What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 8% simple interest?
Correct Answer
$5530
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 8% × 5
= $3950 ×8/100 × 5
= 3950 × 8 × 5/100
= 31600 × 5/100
= 158000/100
= $1580
Thus, Simple Interest = $1580
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 = $3950 + $1580
= $5530
Thus, Amount to be paid = $5530 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 = $3950
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 5 years
Thus, Amount (A)
= $3950 + ($3950 × 8% × 5)
= $3950 + ($3950 ×8/100 × 5)
= $3950 + (3950 × 8 × 5/100)
= $3950 + (31600 × 5/100)
= $3950 + (158000/100)
= $3950 + $1580 = $5530
Thus, Amount (A) to be paid = $5530 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 $3950, the simple interest in 1 year
= 8/100 × 3950
= 8 × 3950/100
= 31600/100 = $316
Thus, simple interest for 1 year = $316
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $316 × 5 = $1580
Thus, Simple Interest (SI) = $1580
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $1580
= $5530
Thus, Amount to be paid = $5530 Answer
Similar Questions
(1) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 7 years.
(2) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 7 years.
(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 6% simple interest?
(5) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 7 years.
(7) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 6% simple interest?
(8) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 3% simple interest.
(9) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) How much loan did Kevin borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8165 to clear it?