Question:
What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
Correct Answer
$4355
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 5%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 6
= $3350 ×5/100 × 6
= 3350 × 5 × 6/100
= 16750 × 6/100
= 100500/100
= $1005
Thus, Simple Interest = $1005
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 + $1005
= $4355
Thus, Amount to be paid = $4355 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) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3350 + ($3350 × 5% × 6)
= $3350 + ($3350 ×5/100 × 6)
= $3350 + (3350 × 5 × 6/100)
= $3350 + (16750 × 6/100)
= $3350 + (100500/100)
= $3350 + $1005 = $4355
Thus, Amount (A) to be paid = $4355 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3350, the simple interest in 1 year
= 5/100 × 3350
= 5 × 3350/100
= 16750/100 = $167.5
Thus, simple interest for 1 year = $167.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $167.5 × 6 = $1005
Thus, Simple Interest (SI) = $1005
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1005
= $4355
Thus, Amount to be paid = $4355 Answer
Similar Questions
(1) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(2) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 2% simple interest?
(3) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.
(4) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if William borrowed a sum of $3250 at a 5% simple interest?
(6) Donald had to pay $4905 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(9) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9536 to clear the loan, then find the time period of the loan.
(10) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $9086 to clear the loan, then find the time period of the loan.