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) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(2) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $11000 to clear the loan, then find the time period of the loan.
(3) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 2% simple interest?
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.
(5) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(6) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 10% simple interest?
(7) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 8 years.
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 4 years.
(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 4 years.
(10) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?