Question:
What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?
Correct Answer
$5025
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 10%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 5
= $3350 ×10/100 × 5
= 3350 × 10 × 5/100
= 33500 × 5/100
= 167500/100
= $1675
Thus, Simple Interest = $1675
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 + $1675
= $5025
Thus, Amount to be paid = $5025 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) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3350 + ($3350 × 10% × 5)
= $3350 + ($3350 ×10/100 × 5)
= $3350 + (3350 × 10 × 5/100)
= $3350 + (33500 × 5/100)
= $3350 + (167500/100)
= $3350 + $1675 = $5025
Thus, Amount (A) to be paid = $5025 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3350, the simple interest in 1 year
= 10/100 × 3350
= 10 × 3350/100
= 33500/100 = $335
Thus, simple interest for 1 year = $335
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $335 × 5 = $1675
Thus, Simple Interest (SI) = $1675
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1675
= $5025
Thus, Amount to be paid = $5025 Answer
Similar Questions
(1) How much loan did Sandra borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7417.5 to clear it?
(2) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.
(3) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(4) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.
(5) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 7% simple interest?
(6) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?
(7) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.
(8) 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.
(9) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(10) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.