Question:
Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 3 years.
Correct Answer
$4071
Solution And Explanation
Solution
Given,
Principal (P) = $3450
Rate of Simple Interest (SI) = 6%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $3450 × 6% × 3
= $3450 ×6/100 × 3
= 3450 × 6 × 3/100
= 20700 × 3/100
= 62100/100
= $621
Thus, Simple Interest = $621
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 = $3450 + $621
= $4071
Thus, Amount to be paid = $4071 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 = $3450
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 3 years
Thus, Amount (A)
= $3450 + ($3450 × 6% × 3)
= $3450 + ($3450 ×6/100 × 3)
= $3450 + (3450 × 6 × 3/100)
= $3450 + (20700 × 3/100)
= $3450 + (62100/100)
= $3450 + $621 = $4071
Thus, Amount (A) to be paid = $4071 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3450, the simple interest in 1 year
= 6/100 × 3450
= 6 × 3450/100
= 20700/100 = $207
Thus, simple interest for 1 year = $207
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $207 × 3 = $621
Thus, Simple Interest (SI) = $621
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $621
= $4071
Thus, Amount to be paid = $4071 Answer
Similar Questions
(1) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
(2) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 6% simple interest?
(3) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(4) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(5) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
(7) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?
(8) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(10) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 6% simple interest?