Question:
What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?
Correct Answer
$3808
Solution And Explanation
Solution
Given,
Principal (P) = $3400
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) = $3400 × 2% × 6
= $3400 ×2/100 × 6
= 3400 × 2 × 6/100
= 6800 × 6/100
= 40800/100
= $408
Thus, Simple Interest = $408
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 = $3400 + $408
= $3808
Thus, Amount to be paid = $3808 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 = $3400
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3400 + ($3400 × 2% × 6)
= $3400 + ($3400 ×2/100 × 6)
= $3400 + (3400 × 2 × 6/100)
= $3400 + (6800 × 6/100)
= $3400 + (40800/100)
= $3400 + $408 = $3808
Thus, Amount (A) to be paid = $3808 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 $3400, the simple interest in 1 year
= 2/100 × 3400
= 2 × 3400/100
= 6800/100 = $68
Thus, simple interest for 1 year = $68
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $68 × 6 = $408
Thus, Simple Interest (SI) = $408
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $408
= $3808
Thus, Amount to be paid = $3808 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(2) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.
(3) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.
(4) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(5) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(6) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 2% simple interest?
(7) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(8) What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?
(9) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 6% simple interest?