Question:
What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?
Correct Answer
$4088
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 2% × 6
= $3650 ×2/100 × 6
= 3650 × 2 × 6/100
= 7300 × 6/100
= 43800/100
= $438
Thus, Simple Interest = $438
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 = $3650 + $438
= $4088
Thus, Amount to be paid = $4088 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 = $3650
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3650 + ($3650 × 2% × 6)
= $3650 + ($3650 ×2/100 × 6)
= $3650 + (3650 × 2 × 6/100)
= $3650 + (7300 × 6/100)
= $3650 + (43800/100)
= $3650 + $438 = $4088
Thus, Amount (A) to be paid = $4088 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 $3650, the simple interest in 1 year
= 2/100 × 3650
= 2 × 3650/100
= 7300/100 = $73
Thus, simple interest for 1 year = $73
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $73 × 6 = $438
Thus, Simple Interest (SI) = $438
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $438
= $4088
Thus, Amount to be paid = $4088 Answer
Similar Questions
(1) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?
(2) Daniel had to pay $4469 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) What amount does John have to pay after 6 years if he takes a loan of $3200 at 5% simple interest?
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 3 years.
(5) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(6) Calculate the amount due if Patricia borrowed a sum of $3150 at 6% simple interest for 4 years.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.
(8) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(9) Lisa had to pay $4293 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 5% simple interest?