Question:
What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?
Correct Answer
$5402
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 8% × 6
= $3650 ×8/100 × 6
= 3650 × 8 × 6/100
= 29200 × 6/100
= 175200/100
= $1752
Thus, Simple Interest = $1752
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 + $1752
= $5402
Thus, Amount to be paid = $5402 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) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3650 + ($3650 × 8% × 6)
= $3650 + ($3650 ×8/100 × 6)
= $3650 + (3650 × 8 × 6/100)
= $3650 + (29200 × 6/100)
= $3650 + (175200/100)
= $3650 + $1752 = $5402
Thus, Amount (A) to be paid = $5402 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 $3650, the simple interest in 1 year
= 8/100 × 3650
= 8 × 3650/100
= 29200/100 = $292
Thus, simple interest for 1 year = $292
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $292 × 6 = $1752
Thus, Simple Interest (SI) = $1752
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $1752
= $5402
Thus, Amount to be paid = $5402 Answer
Similar Questions
(1) In how much time a principal of $3150 will amount to $3276 at a simple interest of 2% per annum?
(2) If James borrowed $3000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) If Joseph paid $4440 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 6% simple interest for 8 years.
(5) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 9% simple interest.
(6) If Mary paid $3416 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 5% simple interest.
(8) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 6% simple interest.
(9) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.
(10) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.