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) What amount does John have to pay after 5 years if he takes a loan of $3200 at 9% simple interest?
(2) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 8% simple interest.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(4) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) In how much time a principal of $3150 will amount to $3780 at a simple interest of 4% per annum?
(6) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 7 years.
(7) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8682.5 to clear it?
(8) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.
(9) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(10) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 9% simple interest?