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) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 3 years.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
(4) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 6% simple interest?
(5) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 8 years.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 7 years.
(7) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(10) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.