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) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 3 years.
(2) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 8% simple interest?
(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?
(4) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10595 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 7 years.
(6) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?
(8) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 9% simple interest.
(10) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.