Question:
What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 10% simple interest?
Correct Answer
$5680
Solution And Explanation
Solution
Given,
Principal (P) = $3550
Rate of Simple Interest (SI) = 10%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 6
= $3550 ×10/100 × 6
= 3550 × 10 × 6/100
= 35500 × 6/100
= 213000/100
= $2130
Thus, Simple Interest = $2130
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 + $2130
= $5680
Thus, Amount to be paid = $5680 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) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3550 + ($3550 × 10% × 6)
= $3550 + ($3550 ×10/100 × 6)
= $3550 + (3550 × 10 × 6/100)
= $3550 + (35500 × 6/100)
= $3550 + (213000/100)
= $3550 + $2130 = $5680
Thus, Amount (A) to be paid = $5680 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3550, the simple interest in 1 year
= 10/100 × 3550
= 10 × 3550/100
= 35500/100 = $355
Thus, simple interest for 1 year = $355
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $355 × 6 = $2130
Thus, Simple Interest (SI) = $2130
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3550 + $2130
= $5680
Thus, Amount to be paid = $5680 Answer
Similar Questions
(1) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $9702 to clear the loan, then find the time period of the loan.
(2) If Linda paid $3618 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 8 years.
(4) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 6% simple interest?
(5) How much loan did Ashley borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7860 to clear it?
(6) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $10432 to clear the loan, then find the time period of the loan.
(7) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(8) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8750 to clear it?
(9) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.