Question:
What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 4% simple interest?
Correct Answer
$4402
Solution And Explanation
Solution
Given,
Principal (P) = $3550
Rate of Simple Interest (SI) = 4%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 6
= $3550 ×4/100 × 6
= 3550 × 4 × 6/100
= 14200 × 6/100
= 85200/100
= $852
Thus, Simple Interest = $852
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 + $852
= $4402
Thus, Amount to be paid = $4402 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) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3550 + ($3550 × 4% × 6)
= $3550 + ($3550 ×4/100 × 6)
= $3550 + (3550 × 4 × 6/100)
= $3550 + (14200 × 6/100)
= $3550 + (85200/100)
= $3550 + $852 = $4402
Thus, Amount (A) to be paid = $4402 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3550, the simple interest in 1 year
= 4/100 × 3550
= 4 × 3550/100
= 14200/100 = $142
Thus, simple interest for 1 year = $142
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $142 × 6 = $852
Thus, Simple Interest (SI) = $852
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $852
= $4402
Thus, Amount to be paid = $4402 Answer
Similar Questions
(1) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.
(2) If Andrew paid $5184 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) How much loan did Nancy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6765 to clear it?
(4) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
(5) What amount does John have to pay after 6 years if he takes a loan of $3200 at 5% simple interest?
(6) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9230 to clear the loan, then find the time period of the loan.
(7) Andrew had to pay $5088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 9% simple interest?
(9) If Thomas borrowed $3800 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.