Question:
What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?
Correct Answer
$4312
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 2% × 6
= $3850 ×2/100 × 6
= 3850 × 2 × 6/100
= 7700 × 6/100
= 46200/100
= $462
Thus, Simple Interest = $462
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 = $3850 + $462
= $4312
Thus, Amount to be paid = $4312 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 = $3850
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3850 + ($3850 × 2% × 6)
= $3850 + ($3850 ×2/100 × 6)
= $3850 + (3850 × 2 × 6/100)
= $3850 + (7700 × 6/100)
= $3850 + (46200/100)
= $3850 + $462 = $4312
Thus, Amount (A) to be paid = $4312 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 $3850, the simple interest in 1 year
= 2/100 × 3850
= 2 × 3850/100
= 7700/100 = $77
Thus, simple interest for 1 year = $77
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $77 × 6 = $462
Thus, Simple Interest (SI) = $462
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $462
= $4312
Thus, Amount to be paid = $4312 Answer
Similar Questions
(1) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $10370 to clear the loan, then find the time period of the loan.
(2) If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(4) How much loan did Robert borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5610 to clear it?
(5) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 8 years.
(6) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(7) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8507 to clear the loan, then find the time period of the loan.
(8) What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?
(9) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 4 years.