Question:
What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 4% simple interest?
Correct Answer
$4278
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 4% × 6
= $3450 ×4/100 × 6
= 3450 × 4 × 6/100
= 13800 × 6/100
= 82800/100
= $828
Thus, Simple Interest = $828
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 = $3450 + $828
= $4278
Thus, Amount to be paid = $4278 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 = $3450
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3450 + ($3450 × 4% × 6)
= $3450 + ($3450 ×4/100 × 6)
= $3450 + (3450 × 4 × 6/100)
= $3450 + (13800 × 6/100)
= $3450 + (82800/100)
= $3450 + $828 = $4278
Thus, Amount (A) to be paid = $4278 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 $3450, the simple interest in 1 year
= 4/100 × 3450
= 4 × 3450/100
= 13800/100 = $138
Thus, simple interest for 1 year = $138
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $138 × 6 = $828
Thus, Simple Interest (SI) = $828
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $828
= $4278
Thus, Amount to be paid = $4278 Answer
Similar Questions
(1) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(3) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?
(4) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9593 to clear the loan, then find the time period of the loan.
(5) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10824 to clear the loan, then find the time period of the loan.
(6) Donald had to pay $4770 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 6% simple interest?
(8) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 7 years.
(10) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.