Question:
Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 4 years.
Correct Answer
$4898
Solution And Explanation
Solution
Given,
Principal (P) = $3950
Rate of Simple Interest (SI) = 6%
Time (t) = 4 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% × 4
= $3950 ×6/100 × 4
= 3950 × 6 × 4/100
= 23700 × 4/100
= 94800/100
= $948
Thus, Simple Interest = $948
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 + $948
= $4898
Thus, Amount to be paid = $4898 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) = 4 years
Thus, Amount (A)
= $3950 + ($3950 × 6% × 4)
= $3950 + ($3950 ×6/100 × 4)
= $3950 + (3950 × 6 × 4/100)
= $3950 + (23700 × 4/100)
= $3950 + (94800/100)
= $3950 + $948 = $4898
Thus, Amount (A) to be paid = $4898 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 4 years
= Simple interest for 1 year × 4
= $237 × 4 = $948
Thus, Simple Interest (SI) = $948
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $948
= $4898
Thus, Amount to be paid = $4898 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 4 years.
(2) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 8 years.
(4) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.
(5) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 10% simple interest?
(6) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.
(7) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.
(8) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 4% simple interest?
(9) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $12200 to clear the loan, then find the time period of the loan.
(10) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.