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) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 7 years.
(2) Find the amount to be paid if David borrowed a sum of $5400 at 7% simple interest for 8 years.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 7 years.
(4) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 9% simple interest.
(5) How much loan did Charles borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7375 to clear it?
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 8 years.
(7) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(8) How much loan did Kevin borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7810 to clear it?
(9) Andrew had to pay $5232 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 7 years.