Question:
What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 7% simple interest?
Correct Answer
$4757
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 7%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 6
= $3350 ×7/100 × 6
= 3350 × 7 × 6/100
= 23450 × 6/100
= 140700/100
= $1407
Thus, Simple Interest = $1407
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 + $1407
= $4757
Thus, Amount to be paid = $4757 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) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3350 + ($3350 × 7% × 6)
= $3350 + ($3350 ×7/100 × 6)
= $3350 + (3350 × 7 × 6/100)
= $3350 + (23450 × 6/100)
= $3350 + (140700/100)
= $3350 + $1407 = $4757
Thus, Amount (A) to be paid = $4757 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3350, the simple interest in 1 year
= 7/100 × 3350
= 7 × 3350/100
= 23450/100 = $234.5
Thus, simple interest for 1 year = $234.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $234.5 × 6 = $1407
Thus, Simple Interest (SI) = $1407
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1407
= $4757
Thus, Amount to be paid = $4757 Answer
Similar Questions
(1) If Christopher paid $4640 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) If Kenneth paid $5600 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Matthew had to pay $4452 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) How much loan did John borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5980 to clear it?
(5) If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 7 years.
(7) Matthew had to pay $4830 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(9) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7872 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.