Question:
What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
Correct Answer
$4012
Solution And Explanation
Solution
Given,
Principal (P) = $3400
Rate of Simple Interest (SI) = 3%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3400 × 3% × 6
= $3400 ×3/100 × 6
= 3400 × 3 × 6/100
= 10200 × 6/100
= 61200/100
= $612
Thus, Simple Interest = $612
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 = $3400 + $612
= $4012
Thus, Amount to be paid = $4012 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 = $3400
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3400 + ($3400 × 3% × 6)
= $3400 + ($3400 ×3/100 × 6)
= $3400 + (3400 × 3 × 6/100)
= $3400 + (10200 × 6/100)
= $3400 + (61200/100)
= $3400 + $612 = $4012
Thus, Amount (A) to be paid = $4012 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3400, the simple interest in 1 year
= 3/100 × 3400
= 3 × 3400/100
= 10200/100 = $102
Thus, simple interest for 1 year = $102
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $102 × 6 = $612
Thus, Simple Interest (SI) = $612
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $612
= $4012
Thus, Amount to be paid = $4012 Answer
Similar Questions
(1) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(2) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 5% simple interest?
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(4) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 10% simple interest?
(5) If John paid $3584 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.
(7) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 9% simple interest?
(8) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8745 to clear it?
(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 10% simple interest for 7 years.
(10) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.