Question:
What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 4% simple interest?
Correct Answer
$4154
Solution And Explanation
Solution
Given,
Principal (P) = $3350
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) = $3350 × 4% × 6
= $3350 ×4/100 × 6
= 3350 × 4 × 6/100
= 13400 × 6/100
= 80400/100
= $804
Thus, Simple Interest = $804
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 = $3350 + $804
= $4154
Thus, Amount to be paid = $4154 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 = $3350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3350 + ($3350 × 4% × 6)
= $3350 + ($3350 ×4/100 × 6)
= $3350 + (3350 × 4 × 6/100)
= $3350 + (13400 × 6/100)
= $3350 + (80400/100)
= $3350 + $804 = $4154
Thus, Amount (A) to be paid = $4154 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 $3350, the simple interest in 1 year
= 4/100 × 3350
= 4 × 3350/100
= 13400/100 = $134
Thus, simple interest for 1 year = $134
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $134 × 6 = $804
Thus, Simple Interest (SI) = $804
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3350 + $804
= $4154
Thus, Amount to be paid = $4154 Answer
Similar Questions
(1) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.
(2) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(4) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7208 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 3 years.
(6) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.
(8) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 4% simple interest.
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 8 years.
(10) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.