Question:
What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 6% simple interest?
Correct Answer
$5070
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 6% × 5
= $3900 ×6/100 × 5
= 3900 × 6 × 5/100
= 23400 × 5/100
= 117000/100
= $1170
Thus, Simple Interest = $1170
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 = $3900 + $1170
= $5070
Thus, Amount to be paid = $5070 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 = $3900
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3900 + ($3900 × 6% × 5)
= $3900 + ($3900 ×6/100 × 5)
= $3900 + (3900 × 6 × 5/100)
= $3900 + (23400 × 5/100)
= $3900 + (117000/100)
= $3900 + $1170 = $5070
Thus, Amount (A) to be paid = $5070 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 $3900, the simple interest in 1 year
= 6/100 × 3900
= 6 × 3900/100
= 23400/100 = $234
Thus, simple interest for 1 year = $234
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $234 × 5 = $1170
Thus, Simple Interest (SI) = $1170
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $1170
= $5070
Thus, Amount to be paid = $5070 Answer
Similar Questions
(1) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 8 years.
(2) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
(3) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 6% simple interest.
(4) If Robert paid $3472 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 4 years.
(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 3 years.
(9) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8700 to clear it?
(10) If Betty paid $4930 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.