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) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 3 years.
(2) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 3 years.
(3) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?
(4) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 4% simple interest?
(5) In how much time a principal of $3100 will amount to $3472 at a simple interest of 4% per annum?
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.
(7) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 7% simple interest?
(8) How much loan did Sarah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7020 to clear it?
(9) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 5% simple interest.
(10) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.