Question:
What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 2% simple interest?
Correct Answer
$3416
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 2%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3050 × 2% × 6
= $3050 ×2/100 × 6
= 3050 × 2 × 6/100
= 6100 × 6/100
= 36600/100
= $366
Thus, Simple Interest = $366
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 = $3050 + $366
= $3416
Thus, Amount to be paid = $3416 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 = $3050
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3050 + ($3050 × 2% × 6)
= $3050 + ($3050 ×2/100 × 6)
= $3050 + (3050 × 2 × 6/100)
= $3050 + (6100 × 6/100)
= $3050 + (36600/100)
= $3050 + $366 = $3416
Thus, Amount (A) to be paid = $3416 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3050, the simple interest in 1 year
= 2/100 × 3050
= 2 × 3050/100
= 6100/100 = $61
Thus, simple interest for 1 year = $61
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $61 × 6 = $366
Thus, Simple Interest (SI) = $366
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $366
= $3416
Thus, Amount to be paid = $3416 Answer
Similar Questions
(1) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 4% simple interest.
(2) If Lisa paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
(4) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(5) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?
(6) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.
(8) Lisa had to pay $4536 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 8 years.