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) How much loan did Ronald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8250 to clear it?
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(3) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(5) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 3% simple interest?
(6) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 8% simple interest.
(7) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10168 to clear the loan, then find the time period of the loan.
(8) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6120 to clear the loan, then find the time period of the loan.
(10) Donald had to pay $5040 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.