Question:
What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?
Correct Answer
$4071
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 3% × 6
= $3450 ×3/100 × 6
= 3450 × 3 × 6/100
= 10350 × 6/100
= 62100/100
= $621
Thus, Simple Interest = $621
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 = $3450 + $621
= $4071
Thus, Amount to be paid = $4071 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 = $3450
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3450 + ($3450 × 3% × 6)
= $3450 + ($3450 ×3/100 × 6)
= $3450 + (3450 × 3 × 6/100)
= $3450 + (10350 × 6/100)
= $3450 + (62100/100)
= $3450 + $621 = $4071
Thus, Amount (A) to be paid = $4071 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 $3450, the simple interest in 1 year
= 3/100 × 3450
= 3 × 3450/100
= 10350/100 = $103.5
Thus, simple interest for 1 year = $103.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $103.5 × 6 = $621
Thus, Simple Interest (SI) = $621
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $621
= $4071
Thus, Amount to be paid = $4071 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(2) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?
(5) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 4 years.
(7) How much loan did Steven borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7590 to clear it?
(8) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(9) What amount does David have to pay after 5 years if he takes a loan of $3400 at 4% simple interest?
(10) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $13300 to clear the loan, then find the time period of the loan.