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) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10595 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 7 years.
(5) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(7) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 8 years.
(8) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.
(10) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.