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) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.
(2) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?
(3) If Linda paid $3618 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) Find the amount to be paid if Mary borrowed a sum of $5050 at 9% simple interest for 8 years.
(5) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.
(6) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(7) If Mark paid $5104 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 4 years.
(9) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 6% simple interest?
(10) If Robert paid $3348 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.