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) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13800 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 4 years.
(3) Thomas had to pay $4256 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(6) 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.
(7) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3000 will amount to $3240 at a simple interest of 4% per annum?
(9) Anthony had to pay $4945 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9536 to clear the loan, then find the time period of the loan.