Question:
What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 2% simple interest?
Correct Answer
$3864
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 2% × 6
= $3450 ×2/100 × 6
= 3450 × 2 × 6/100
= 6900 × 6/100
= 41400/100
= $414
Thus, Simple Interest = $414
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 = $3450 + $414
= $3864
Thus, Amount to be paid = $3864 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 = $3450
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3450 + ($3450 × 2% × 6)
= $3450 + ($3450 ×2/100 × 6)
= $3450 + (3450 × 2 × 6/100)
= $3450 + (6900 × 6/100)
= $3450 + (41400/100)
= $3450 + $414 = $3864
Thus, Amount (A) to be paid = $3864 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 $3450, the simple interest in 1 year
= 2/100 × 3450
= 2 × 3450/100
= 6900/100 = $69
Thus, simple interest for 1 year = $69
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $69 × 6 = $414
Thus, Simple Interest (SI) = $414
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $414
= $3864
Thus, Amount to be paid = $3864 Answer
Similar Questions
(1) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?
(2) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 7 years.
(3) If Paul paid $5640 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(5) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.
(6) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 4 years.
(8) If Barbara borrowed $3550 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 8 years.