Question:
What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?
Correct Answer
$3782
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 4%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $3050 × 4% × 6
= $3050 ×4/100 × 6
= 3050 × 4 × 6/100
= 12200 × 6/100
= 73200/100
= $732
Thus, Simple Interest = $732
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 = $3050 + $732
= $3782
Thus, Amount to be paid = $3782 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 = $3050
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3050 + ($3050 × 4% × 6)
= $3050 + ($3050 ×4/100 × 6)
= $3050 + (3050 × 4 × 6/100)
= $3050 + (12200 × 6/100)
= $3050 + (73200/100)
= $3050 + $732 = $3782
Thus, Amount (A) to be paid = $3782 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3050, the simple interest in 1 year
= 4/100 × 3050
= 4 × 3050/100
= 12200/100 = $122
Thus, simple interest for 1 year = $122
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $122 × 6 = $732
Thus, Simple Interest (SI) = $732
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $732
= $3782
Thus, Amount to be paid = $3782 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(3) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6540 to clear it?
(4) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 4 years.
(5) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.
(6) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(8) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?
(9) 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.
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 7% simple interest?