Question:
What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
Correct Answer
$5183
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 7% × 6
= $3650 ×7/100 × 6
= 3650 × 7 × 6/100
= 25550 × 6/100
= 153300/100
= $1533
Thus, Simple Interest = $1533
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 = $3650 + $1533
= $5183
Thus, Amount to be paid = $5183 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 = $3650
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3650 + ($3650 × 7% × 6)
= $3650 + ($3650 ×7/100 × 6)
= $3650 + (3650 × 7 × 6/100)
= $3650 + (25550 × 6/100)
= $3650 + (153300/100)
= $3650 + $1533 = $5183
Thus, Amount (A) to be paid = $5183 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 $3650, the simple interest in 1 year
= 7/100 × 3650
= 7 × 3650/100
= 25550/100 = $255.5
Thus, simple interest for 1 year = $255.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $255.5 × 6 = $1533
Thus, Simple Interest (SI) = $1533
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $1533
= $5183
Thus, Amount to be paid = $5183 Answer
Similar Questions
(1) If Patricia paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 6% simple interest?
(3) How much loan did John borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6240 to clear it?
(4) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(5) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $12350 to clear the loan, then find the time period of the loan.
(6) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8305 to clear it?
(7) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(8) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(10) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.