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) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 8 years.
(2) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(3) How much loan did Donald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7150 to clear it?
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 4 years.
(5) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.
(6) 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.
(7) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 8 years.
(9) Susan had to pay $4088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.