Question:
What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 2% simple interest?
Correct Answer
$4256
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 2% × 6
= $3800 ×2/100 × 6
= 3800 × 2 × 6/100
= 7600 × 6/100
= 45600/100
= $456
Thus, Simple Interest = $456
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 = $3800 + $456
= $4256
Thus, Amount to be paid = $4256 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 = $3800
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3800 + ($3800 × 2% × 6)
= $3800 + ($3800 ×2/100 × 6)
= $3800 + (3800 × 2 × 6/100)
= $3800 + (7600 × 6/100)
= $3800 + (45600/100)
= $3800 + $456 = $4256
Thus, Amount (A) to be paid = $4256 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 $3800, the simple interest in 1 year
= 2/100 × 3800
= 2 × 3800/100
= 7600/100 = $76
Thus, simple interest for 1 year = $76
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $76 × 6 = $456
Thus, Simple Interest (SI) = $456
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $456
= $4256
Thus, Amount to be paid = $4256 Answer
Similar Questions
(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 7 years.
(2) If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) What amount does John have to pay after 5 years if he takes a loan of $3200 at 9% simple interest?
(4) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
(5) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(6) If Linda paid $3752 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) 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.
(8) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 7 years.
(10) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 7 years.