Question:
What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 2% simple interest?
Correct Answer
$4368
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 2% × 6
= $3900 ×2/100 × 6
= 3900 × 2 × 6/100
= 7800 × 6/100
= 46800/100
= $468
Thus, Simple Interest = $468
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 = $3900 + $468
= $4368
Thus, Amount to be paid = $4368 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 = $3900
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3900 + ($3900 × 2% × 6)
= $3900 + ($3900 ×2/100 × 6)
= $3900 + (3900 × 2 × 6/100)
= $3900 + (7800 × 6/100)
= $3900 + (46800/100)
= $3900 + $468 = $4368
Thus, Amount (A) to be paid = $4368 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 $3900, the simple interest in 1 year
= 2/100 × 3900
= 2 × 3900/100
= 7800/100 = $78
Thus, simple interest for 1 year = $78
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $78 × 6 = $468
Thus, Simple Interest (SI) = $468
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $468
= $4368
Thus, Amount to be paid = $4368 Answer
Similar Questions
(1) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 8% simple interest?
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 6% simple interest?
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.
(4) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 7% simple interest.
(5) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7546 to clear the loan, then find the time period of the loan.
(6) Steven had to pay $5014 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 7% simple interest?
(8) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 4 years.
(9) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6720 to clear the loan, then find the time period of the loan.
(10) If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.