Question:
What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 4% simple interest?
Correct Answer
$3844
Solution And Explanation
Solution
Given,
Principal (P) = $3100
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) = $3100 × 4% × 6
= $3100 ×4/100 × 6
= 3100 × 4 × 6/100
= 12400 × 6/100
= 74400/100
= $744
Thus, Simple Interest = $744
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 = $3100 + $744
= $3844
Thus, Amount to be paid = $3844 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 = $3100
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3100 + ($3100 × 4% × 6)
= $3100 + ($3100 ×4/100 × 6)
= $3100 + (3100 × 4 × 6/100)
= $3100 + (12400 × 6/100)
= $3100 + (74400/100)
= $3100 + $744 = $3844
Thus, Amount (A) to be paid = $3844 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 $3100, the simple interest in 1 year
= 4/100 × 3100
= 4 × 3100/100
= 12400/100 = $124
Thus, simple interest for 1 year = $124
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $124 × 6 = $744
Thus, Simple Interest (SI) = $744
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $744
= $3844
Thus, Amount to be paid = $3844 Answer
Similar Questions
(1) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 3 years.
(3) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(5) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(6) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6258 to clear the loan, then find the time period of the loan.
(7) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7003 to clear the loan, then find the time period of the loan.
(8) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 10% simple interest?
(9) If Donald paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) What amount will be due after 2 years if William borrowed a sum of $3250 at a 8% simple interest?