Question:
What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 9% simple interest?
Correct Answer
$4857.5
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 9%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3350 × 9% × 5
= $3350 ×9/100 × 5
= 3350 × 9 × 5/100
= 30150 × 5/100
= 150750/100
= $1507.5
Thus, Simple Interest = $1507.5
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 = $3350 + $1507.5
= $4857.5
Thus, Amount to be paid = $4857.5 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 = $3350
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3350 + ($3350 × 9% × 5)
= $3350 + ($3350 ×9/100 × 5)
= $3350 + (3350 × 9 × 5/100)
= $3350 + (30150 × 5/100)
= $3350 + (150750/100)
= $3350 + $1507.5 = $4857.5
Thus, Amount (A) to be paid = $4857.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3350, the simple interest in 1 year
= 9/100 × 3350
= 9 × 3350/100
= 30150/100 = $301.5
Thus, simple interest for 1 year = $301.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $301.5 × 5 = $1507.5
Thus, Simple Interest (SI) = $1507.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1507.5
= $4857.5
Thus, Amount to be paid = $4857.5 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?
(3) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9720 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.
(5) In how much time a principal of $3050 will amount to $3416 at a simple interest of 4% per annum?
(6) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6512 to clear the loan, then find the time period of the loan.
(7) If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) 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.
(9) If Margaret paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.