Question:
What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 10% simple interest?
Correct Answer
$5325
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 10% × 5
= $3550 ×10/100 × 5
= 3550 × 10 × 5/100
= 35500 × 5/100
= 177500/100
= $1775
Thus, Simple Interest = $1775
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 + $1775
= $5325
Thus, Amount to be paid = $5325 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) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3550 + ($3550 × 10% × 5)
= $3550 + ($3550 ×10/100 × 5)
= $3550 + (3550 × 10 × 5/100)
= $3550 + (35500 × 5/100)
= $3550 + (177500/100)
= $3550 + $1775 = $5325
Thus, Amount (A) to be paid = $5325 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 $3550, the simple interest in 1 year
= 10/100 × 3550
= 10 × 3550/100
= 35500/100 = $355
Thus, simple interest for 1 year = $355
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $355 × 5 = $1775
Thus, Simple Interest (SI) = $1775
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1775
= $5325
Thus, Amount to be paid = $5325 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(2) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $10140 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 6% simple interest?
(4) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.
(6) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 9% simple interest.
(7) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 4% simple interest?
(8) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $6720 to clear the loan, then find the time period of the loan.
(9) If Mary paid $3416 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $12540 to clear the loan, then find the time period of the loan.