Question:
What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 10% simple interest?
Correct Answer
$5475
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 10% × 5
= $3650 ×10/100 × 5
= 3650 × 10 × 5/100
= 36500 × 5/100
= 182500/100
= $1825
Thus, Simple Interest = $1825
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 = $3650 + $1825
= $5475
Thus, Amount to be paid = $5475 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 = $3650
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3650 + ($3650 × 10% × 5)
= $3650 + ($3650 ×10/100 × 5)
= $3650 + (3650 × 10 × 5/100)
= $3650 + (36500 × 5/100)
= $3650 + (182500/100)
= $3650 + $1825 = $5475
Thus, Amount (A) to be paid = $5475 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 $3650, the simple interest in 1 year
= 10/100 × 3650
= 10 × 3650/100
= 36500/100 = $365
Thus, simple interest for 1 year = $365
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $365 × 5 = $1825
Thus, Simple Interest (SI) = $1825
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $1825
= $5475
Thus, Amount to be paid = $5475 Answer
Similar Questions
(1) Jessica had to pay $4200 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(3) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.
(5) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 4 years.
(7) What amount will be due after 2 years if John borrowed a sum of $3100 at a 6% simple interest?
(8) If Mary paid $3294 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) What amount does John have to pay after 6 years if he takes a loan of $3200 at 2% simple interest?
(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 7 years.