Question:
What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 9% simple interest?
Correct Answer
$5147.5
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 9% × 5
= $3550 ×9/100 × 5
= 3550 × 9 × 5/100
= 31950 × 5/100
= 159750/100
= $1597.5
Thus, Simple Interest = $1597.5
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 = $3550 + $1597.5
= $5147.5
Thus, Amount to be paid = $5147.5 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 = $3550
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3550 + ($3550 × 9% × 5)
= $3550 + ($3550 ×9/100 × 5)
= $3550 + (3550 × 9 × 5/100)
= $3550 + (31950 × 5/100)
= $3550 + (159750/100)
= $3550 + $1597.5 = $5147.5
Thus, Amount (A) to be paid = $5147.5 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 $3550, the simple interest in 1 year
= 9/100 × 3550
= 9 × 3550/100
= 31950/100 = $319.5
Thus, simple interest for 1 year = $319.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $319.5 × 5 = $1597.5
Thus, Simple Interest (SI) = $1597.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1597.5
= $5147.5
Thus, Amount to be paid = $5147.5 Answer
Similar Questions
(1) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 7 years.
(2) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9472 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 8% simple interest.
(4) How much loan did Sarah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7020 to clear it?
(5) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 3 years.
(6) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(7) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(8) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 8 years.