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) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.
(2) How much loan did Charles borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6785 to clear it?
(3) What amount does David have to pay after 6 years if he takes a loan of $3400 at 10% simple interest?
(4) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(5) If Andrew paid $5184 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Andrew had to pay $5232 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 4 years.
(8) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.
(9) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3200 will amount to $3392 at a simple interest of 2% per annum?