Question:
What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 7% simple interest?
Correct Answer
$5041
Solution And Explanation
Solution
Given,
Principal (P) = $3550
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) = $3550 × 7% × 6
= $3550 ×7/100 × 6
= 3550 × 7 × 6/100
= 24850 × 6/100
= 149100/100
= $1491
Thus, Simple Interest = $1491
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 + $1491
= $5041
Thus, Amount to be paid = $5041 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) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3550 + ($3550 × 7% × 6)
= $3550 + ($3550 ×7/100 × 6)
= $3550 + (3550 × 7 × 6/100)
= $3550 + (24850 × 6/100)
= $3550 + (149100/100)
= $3550 + $1491 = $5041
Thus, Amount (A) to be paid = $5041 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 $3550, the simple interest in 1 year
= 7/100 × 3550
= 7 × 3550/100
= 24850/100 = $248.5
Thus, simple interest for 1 year = $248.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $248.5 × 6 = $1491
Thus, Simple Interest (SI) = $1491
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $1491
= $5041
Thus, Amount to be paid = $5041 Answer
Similar Questions
(1) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9834 to clear the loan, then find the time period of the loan.
(2) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 7% simple interest?
(4) In how much time a principal of $3100 will amount to $3410 at a simple interest of 5% per annum?
(5) What amount does David have to pay after 6 years if he takes a loan of $3400 at 9% simple interest?
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 4 years.
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 9% simple interest for 7 years.
(8) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(9) Robert had to pay $3472 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) 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.