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) How much loan did Susan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7062.5 to clear it?
(2) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 8 years.
(3) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.
(4) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 9% simple interest?
(5) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 8 years.
(6) Nancy had to pay $4648 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 7 years.
(8) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.
(9) What amount does William have to pay after 6 years if he takes a loan of $3500 at 4% simple interest?
(10) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.