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) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
(2) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(3) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?
(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
(6) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(7) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(8) In how much time a principal of $3150 will amount to $3402 at a simple interest of 4% per annum?
(9) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?
(10) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 7 years.