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) Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 4 years.
(2) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 4% simple interest?
(3) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7820 to clear the loan, then find the time period of the loan.
(4) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8940 to clear the loan, then find the time period of the loan.
(5) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(6) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(7) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 10% simple interest?
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 3 years.
(9) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.