Question:
What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 3% simple interest?
Correct Answer
$4543
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 3% × 6
= $3850 ×3/100 × 6
= 3850 × 3 × 6/100
= 11550 × 6/100
= 69300/100
= $693
Thus, Simple Interest = $693
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 = $3850 + $693
= $4543
Thus, Amount to be paid = $4543 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 = $3850
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3850 + ($3850 × 3% × 6)
= $3850 + ($3850 ×3/100 × 6)
= $3850 + (3850 × 3 × 6/100)
= $3850 + (11550 × 6/100)
= $3850 + (69300/100)
= $3850 + $693 = $4543
Thus, Amount (A) to be paid = $4543 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 $3850, the simple interest in 1 year
= 3/100 × 3850
= 3 × 3850/100
= 11550/100 = $115.5
Thus, simple interest for 1 year = $115.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $115.5 × 6 = $693
Thus, Simple Interest (SI) = $693
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $693
= $4543
Thus, Amount to be paid = $4543 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?
(4) What amount does James have to pay after 6 years if he takes a loan of $3000 at 10% simple interest?
(5) If Thomas paid $4560 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $8313 to clear the loan, then find the time period of the loan.
(7) What amount does William have to pay after 6 years if he takes a loan of $3500 at 8% simple interest?
(8) In how much time a principal of $3150 will amount to $3276 at a simple interest of 2% per annum?
(9) If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 4 years.