Question:
What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 3% simple interest?
Correct Answer
$4661
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 3% × 6
= $3950 ×3/100 × 6
= 3950 × 3 × 6/100
= 11850 × 6/100
= 71100/100
= $711
Thus, Simple Interest = $711
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 = $3950 + $711
= $4661
Thus, Amount to be paid = $4661 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 = $3950
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3950 + ($3950 × 3% × 6)
= $3950 + ($3950 ×3/100 × 6)
= $3950 + (3950 × 3 × 6/100)
= $3950 + (11850 × 6/100)
= $3950 + (71100/100)
= $3950 + $711 = $4661
Thus, Amount (A) to be paid = $4661 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 $3950, the simple interest in 1 year
= 3/100 × 3950
= 3 × 3950/100
= 11850/100 = $118.5
Thus, simple interest for 1 year = $118.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $118.5 × 6 = $711
Thus, Simple Interest (SI) = $711
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $711
= $4661
Thus, Amount to be paid = $4661 Answer
Similar Questions
(1) Donna had to pay $5141 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.
(3) What amount will be due after 2 years if David borrowed a sum of $3200 at a 4% simple interest?
(4) How much loan did Laura borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9027.5 to clear it?
(5) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(6) If Karen paid $4740 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 5% simple interest.
(8) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 7 years.
(10) What amount does James have to pay after 5 years if he takes a loan of $3000 at 3% simple interest?