Question:
What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 2% simple interest?
Correct Answer
$3752
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 2%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 6
= $3350 ×2/100 × 6
= 3350 × 2 × 6/100
= 6700 × 6/100
= 40200/100
= $402
Thus, Simple Interest = $402
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 + $402
= $3752
Thus, Amount to be paid = $3752 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) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3350 + ($3350 × 2% × 6)
= $3350 + ($3350 ×2/100 × 6)
= $3350 + (3350 × 2 × 6/100)
= $3350 + (6700 × 6/100)
= $3350 + (40200/100)
= $3350 + $402 = $3752
Thus, Amount (A) to be paid = $3752 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3350, the simple interest in 1 year
= 2/100 × 3350
= 2 × 3350/100
= 6700/100 = $67
Thus, simple interest for 1 year = $67
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $67 × 6 = $402
Thus, Simple Interest (SI) = $402
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $402
= $3752
Thus, Amount to be paid = $3752 Answer
Similar Questions
(1) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
(2) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 8 years.
(3) Thomas had to pay $4256 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 8 years.
(5) Michael had to pay $3597 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $12350 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 4 years.
(9) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 8 years.
(10) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.