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 William borrowed a sum of $3500 at 9% simple interest for 3 years.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 3 years.
(3) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $11524 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 $7310 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 8% simple interest?
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 7 years.
(7) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 4 years.
(8) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $11600 to clear the loan, then find the time period of the loan.
(9) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(10) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.