Question:
What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?
Correct Answer
$4526
Solution And Explanation
Solution
Given,
Principal (P) = $3650
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) = $3650 × 4% × 6
= $3650 ×4/100 × 6
= 3650 × 4 × 6/100
= 14600 × 6/100
= 87600/100
= $876
Thus, Simple Interest = $876
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 = $3650 + $876
= $4526
Thus, Amount to be paid = $4526 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 = $3650
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3650 + ($3650 × 4% × 6)
= $3650 + ($3650 ×4/100 × 6)
= $3650 + (3650 × 4 × 6/100)
= $3650 + (14600 × 6/100)
= $3650 + (87600/100)
= $3650 + $876 = $4526
Thus, Amount (A) to be paid = $4526 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 $3650, the simple interest in 1 year
= 4/100 × 3650
= 4 × 3650/100
= 14600/100 = $146
Thus, simple interest for 1 year = $146
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $146 × 6 = $876
Thus, Simple Interest (SI) = $876
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3650 + $876
= $4526
Thus, Amount to be paid = $4526 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(2) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.
(3) If Linda borrowed $3350 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(6) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8970 to clear it?
(7) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?
(8) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(9) If Linda paid $3752 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.