Question:
What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 5% simple interest?
Correct Answer
$4615
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 5% × 6
= $3550 ×5/100 × 6
= 3550 × 5 × 6/100
= 17750 × 6/100
= 106500/100
= $1065
Thus, Simple Interest = $1065
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 + $1065
= $4615
Thus, Amount to be paid = $4615 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) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3550 + ($3550 × 5% × 6)
= $3550 + ($3550 ×5/100 × 6)
= $3550 + (3550 × 5 × 6/100)
= $3550 + (17750 × 6/100)
= $3550 + (106500/100)
= $3550 + $1065 = $4615
Thus, Amount (A) to be paid = $4615 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 $3550, the simple interest in 1 year
= 5/100 × 3550
= 5 × 3550/100
= 17750/100 = $177.5
Thus, simple interest for 1 year = $177.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $177.5 × 6 = $1065
Thus, Simple Interest (SI) = $1065
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1065
= $4615
Thus, Amount to be paid = $4615 Answer
Similar Questions
(1) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
(2) If Mary paid $3416 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $12400 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if William borrowed a sum of $3250 at a 6% simple interest?
(5) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 7 years.
(7) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 9% simple interest?
(8) If James paid $3360 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(10) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 4 years.