Question:
What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 6% simple interest?
Correct Answer
$5135
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 6% × 5
= $3950 ×6/100 × 5
= 3950 × 6 × 5/100
= 23700 × 5/100
= 118500/100
= $1185
Thus, Simple Interest = $1185
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 = $3950 + $1185
= $5135
Thus, Amount to be paid = $5135 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 = $3950
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3950 + ($3950 × 6% × 5)
= $3950 + ($3950 ×6/100 × 5)
= $3950 + (3950 × 6 × 5/100)
= $3950 + (23700 × 5/100)
= $3950 + (118500/100)
= $3950 + $1185 = $5135
Thus, Amount (A) to be paid = $5135 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 $3950, the simple interest in 1 year
= 6/100 × 3950
= 6 × 3950/100
= 23700/100 = $237
Thus, simple interest for 1 year = $237
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $237 × 5 = $1185
Thus, Simple Interest (SI) = $1185
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $1185
= $5135
Thus, Amount to be paid = $5135 Answer
Similar Questions
(1) If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 5% simple interest.
(3) In how much time a principal of $3000 will amount to $3360 at a simple interest of 3% per annum?
(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 4 years.
(6) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 6% simple interest?
(7) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?
(8) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 4 years.
(9) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.
(10) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.