Question:
What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?
Correct Answer
$5005
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 6% × 5
= $3850 ×6/100 × 5
= 3850 × 6 × 5/100
= 23100 × 5/100
= 115500/100
= $1155
Thus, Simple Interest = $1155
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 = $3850 + $1155
= $5005
Thus, Amount to be paid = $5005 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 = $3850
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3850 + ($3850 × 6% × 5)
= $3850 + ($3850 ×6/100 × 5)
= $3850 + (3850 × 6 × 5/100)
= $3850 + (23100 × 5/100)
= $3850 + (115500/100)
= $3850 + $1155 = $5005
Thus, Amount (A) to be paid = $5005 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 $3850, the simple interest in 1 year
= 6/100 × 3850
= 6 × 3850/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $231 × 5 = $1155
Thus, Simple Interest (SI) = $1155
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $1155
= $5005
Thus, Amount to be paid = $5005 Answer
Similar Questions
(1) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?
(2) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 7% simple interest?
(3) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 3% simple interest?
(4) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?
(5) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10600 to clear the loan, then find the time period of the loan.
(6) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.
(7) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 9% simple interest?
(8) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?
(9) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?
(10) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.