Question:
What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 2% simple interest?
Correct Answer
$3472
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 2% × 6
= $3100 ×2/100 × 6
= 3100 × 2 × 6/100
= 6200 × 6/100
= 37200/100
= $372
Thus, Simple Interest = $372
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 = $3100 + $372
= $3472
Thus, Amount to be paid = $3472 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 = $3100
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3100 + ($3100 × 2% × 6)
= $3100 + ($3100 ×2/100 × 6)
= $3100 + (3100 × 2 × 6/100)
= $3100 + (6200 × 6/100)
= $3100 + (37200/100)
= $3100 + $372 = $3472
Thus, Amount (A) to be paid = $3472 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 $3100, the simple interest in 1 year
= 2/100 × 3100
= 2 × 3100/100
= 6200/100 = $62
Thus, simple interest for 1 year = $62
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $62 × 6 = $372
Thus, Simple Interest (SI) = $372
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $372
= $3472
Thus, Amount to be paid = $3472 Answer
Similar Questions
(1) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(2) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(5) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 5% simple interest?
(7) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 7% simple interest?
(8) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $9310 to clear the loan, then find the time period of the loan.
(9) Charles had to pay $4134 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 4 years.