Question:
What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 6% simple interest?
Correct Answer
$4940
Solution And Explanation
Solution
Given,
Principal (P) = $3800
Rate of Simple Interest (SI) = 6%
Time (t) = 5 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) = $3800 × 6% × 5
= $3800 ×6/100 × 5
= 3800 × 6 × 5/100
= 22800 × 5/100
= 114000/100
= $1140
Thus, Simple Interest = $1140
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 = $3800 + $1140
= $4940
Thus, Amount to be paid = $4940 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 = $3800
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3800 + ($3800 × 6% × 5)
= $3800 + ($3800 ×6/100 × 5)
= $3800 + (3800 × 6 × 5/100)
= $3800 + (22800 × 5/100)
= $3800 + (114000/100)
= $3800 + $1140 = $4940
Thus, Amount (A) to be paid = $4940 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 $3800, the simple interest in 1 year
= 6/100 × 3800
= 6 × 3800/100
= 22800/100 = $228
Thus, simple interest for 1 year = $228
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $228 × 5 = $1140
Thus, Simple Interest (SI) = $1140
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1140
= $4940
Thus, Amount to be paid = $4940 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.
(2) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
(3) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.
(5) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 8 years.
(7) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) If Lisa paid $4374 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8195 to clear the loan, then find the time period of the loan.
(10) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 3% simple interest?