Question:
What amount does William have to pay after 6 years if he takes a loan of $3500 at 3% simple interest?
Correct Answer
$4130
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 3% × 6
= $3500 ×3/100 × 6
= 3500 × 3 × 6/100
= 10500 × 6/100
= 63000/100
= $630
Thus, Simple Interest = $630
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 = $3500 + $630
= $4130
Thus, Amount to be paid = $4130 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 = $3500
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3500 + ($3500 × 3% × 6)
= $3500 + ($3500 ×3/100 × 6)
= $3500 + (3500 × 3 × 6/100)
= $3500 + (10500 × 6/100)
= $3500 + (63000/100)
= $3500 + $630 = $4130
Thus, Amount (A) to be paid = $4130 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 $3500, the simple interest in 1 year
= 3/100 × 3500
= 3 × 3500/100
= 10500/100 = $105
Thus, simple interest for 1 year = $105
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $105 × 6 = $630
Thus, Simple Interest (SI) = $630
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $630
= $4130
Thus, Amount to be paid = $4130 Answer
Similar Questions
(1) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 10% simple interest?
(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 9% simple interest for 7 years.
(3) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(4) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?
(5) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(6) What amount does James have to pay after 5 years if he takes a loan of $3000 at 6% simple interest?
(7) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8932 to clear the loan, then find the time period of the loan.
(8) Lisa had to pay $4657.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.