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) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 7 years.
(2) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?
(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.
(6) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(7) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8580 to clear it?
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 7 years.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.