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) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(3) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(4) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(5) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(7) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 4 years.
(9) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 9% simple interest.