Question:
What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 3% simple interest?
Correct Answer
$4484
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 3% × 6
= $3800 ×3/100 × 6
= 3800 × 3 × 6/100
= 11400 × 6/100
= 68400/100
= $684
Thus, Simple Interest = $684
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 = $3800 + $684
= $4484
Thus, Amount to be paid = $4484 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 = $3800
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3800 + ($3800 × 3% × 6)
= $3800 + ($3800 ×3/100 × 6)
= $3800 + (3800 × 3 × 6/100)
= $3800 + (11400 × 6/100)
= $3800 + (68400/100)
= $3800 + $684 = $4484
Thus, Amount (A) to be paid = $4484 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 $3800, the simple interest in 1 year
= 3/100 × 3800
= 3 × 3800/100
= 11400/100 = $114
Thus, simple interest for 1 year = $114
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $114 × 6 = $684
Thus, Simple Interest (SI) = $684
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $684
= $4484
Thus, Amount to be paid = $4484 Answer
Similar Questions
(1) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 6% simple interest.
(3) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 8 years.
(5) If William paid $4060 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?
(7) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(8) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(9) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 8% simple interest.