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) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 8 years.
(2) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 8 years.
(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 3% simple interest?
(4) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(5) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 4 years.
(7) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 9% simple interest?
(9) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10332 to clear the loan, then find the time period of the loan.
(10) If Kimberly paid $5580 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.