Question:
Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 3 years.
Correct Answer
$4661
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 6% × 3
= $3950 ×6/100 × 3
= 3950 × 6 × 3/100
= 23700 × 3/100
= 71100/100
= $711
Thus, Simple Interest = $711
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 = $3950 + $711
= $4661
Thus, Amount to be paid = $4661 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 = $3950
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 3 years
Thus, Amount (A)
= $3950 + ($3950 × 6% × 3)
= $3950 + ($3950 ×6/100 × 3)
= $3950 + (3950 × 6 × 3/100)
= $3950 + (23700 × 3/100)
= $3950 + (71100/100)
= $3950 + $711 = $4661
Thus, Amount (A) to be paid = $4661 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 $3950, the simple interest in 1 year
= 6/100 × 3950
= 6 × 3950/100
= 23700/100 = $237
Thus, simple interest for 1 year = $237
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $237 × 3 = $711
Thus, Simple Interest (SI) = $711
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $711
= $4661
Thus, Amount to be paid = $4661 Answer
Similar Questions
(1) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 3 years.
(2) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
(3) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.
(4) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(5) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 6% simple interest?
(6) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 8 years.
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 2% simple interest?
(8) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(9) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8797.5 to clear it?
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.