Question:
What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?
Correct Answer
$3976
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 2% × 6
= $3550 ×2/100 × 6
= 3550 × 2 × 6/100
= 7100 × 6/100
= 42600/100
= $426
Thus, Simple Interest = $426
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 + $426
= $3976
Thus, Amount to be paid = $3976 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) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3550 + ($3550 × 2% × 6)
= $3550 + ($3550 ×2/100 × 6)
= $3550 + (3550 × 2 × 6/100)
= $3550 + (7100 × 6/100)
= $3550 + (42600/100)
= $3550 + $426 = $3976
Thus, Amount (A) to be paid = $3976 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 $3550, the simple interest in 1 year
= 2/100 × 3550
= 2 × 3550/100
= 7100/100 = $71
Thus, simple interest for 1 year = $71
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $71 × 6 = $426
Thus, Simple Interest (SI) = $426
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $426
= $3976
Thus, Amount to be paid = $3976 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.
(2) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(4) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 7 years.
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 10% simple interest for 7 years.
(7) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(8) Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 8 years.
(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 7 years.
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?