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) Find the amount to be paid if Robert borrowed a sum of $5100 at 9% simple interest for 8 years.
(2) In how much time a principal of $3000 will amount to $3240 at a simple interest of 4% per annum?
(3) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 8 years.
(4) If Paul paid $5640 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 4% simple interest?
(6) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10132 to clear the loan, then find the time period of the loan.
(7) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $10496 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.
(9) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(10) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.