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) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6683 to clear the loan, then find the time period of the loan.
(2) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 10% simple interest?
(3) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11222 to clear the loan, then find the time period of the loan.
(4) How much loan did Robert borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5610 to clear it?
(5) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 3% simple interest.
(6) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8094 to clear the loan, then find the time period of the loan.
(7) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 6% simple interest?
(8) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9089 to clear the loan, then find the time period of the loan.
(9) How much loan did Ronald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8250 to clear it?
(10) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.