Question:
What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 3% simple interest?
Correct Answer
$4602
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 3% × 6
= $3900 ×3/100 × 6
= 3900 × 3 × 6/100
= 11700 × 6/100
= 70200/100
= $702
Thus, Simple Interest = $702
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 = $3900 + $702
= $4602
Thus, Amount to be paid = $4602 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 = $3900
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3900 + ($3900 × 3% × 6)
= $3900 + ($3900 ×3/100 × 6)
= $3900 + (3900 × 3 × 6/100)
= $3900 + (11700 × 6/100)
= $3900 + (70200/100)
= $3900 + $702 = $4602
Thus, Amount (A) to be paid = $4602 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 $3900, the simple interest in 1 year
= 3/100 × 3900
= 3 × 3900/100
= 11700/100 = $117
Thus, simple interest for 1 year = $117
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $117 × 6 = $702
Thus, Simple Interest (SI) = $702
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $702
= $4602
Thus, Amount to be paid = $4602 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(2) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 7 years.
(4) How much loan did James borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6000 to clear it?
(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.
(6) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 6% simple interest?
(7) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.
(8) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 3% simple interest.
(9) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?
(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 3% simple interest?