Question:
What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 8% simple interest?
Correct Answer
$4958
Solution And Explanation
Solution
Given,
Principal (P) = $3350
Rate of Simple Interest (SI) = 8%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 6
= $3350 ×8/100 × 6
= 3350 × 8 × 6/100
= 26800 × 6/100
= 160800/100
= $1608
Thus, Simple Interest = $1608
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 + $1608
= $4958
Thus, Amount to be paid = $4958 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) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3350 + ($3350 × 8% × 6)
= $3350 + ($3350 ×8/100 × 6)
= $3350 + (3350 × 8 × 6/100)
= $3350 + (26800 × 6/100)
= $3350 + (160800/100)
= $3350 + $1608 = $4958
Thus, Amount (A) to be paid = $4958 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3350, the simple interest in 1 year
= 8/100 × 3350
= 8 × 3350/100
= 26800/100 = $268
Thus, simple interest for 1 year = $268
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $268 × 6 = $1608
Thus, Simple Interest (SI) = $1608
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $1608
= $4958
Thus, Amount to be paid = $4958 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(2) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
(3) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7599 to clear the loan, then find the time period of the loan.
(4) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(5) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $9955 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.
(7) How much loan did Sarah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7312.5 to clear it?
(8) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 4% simple interest?
(9) How much loan did Brian borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9000 to clear it?
(10) How much loan did John borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5720 to clear it?