Question:
What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 4% simple interest?
Correct Answer
$4712
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 4% × 6
= $3800 ×4/100 × 6
= 3800 × 4 × 6/100
= 15200 × 6/100
= 91200/100
= $912
Thus, Simple Interest = $912
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 = $3800 + $912
= $4712
Thus, Amount to be paid = $4712 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 = $3800
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3800 + ($3800 × 4% × 6)
= $3800 + ($3800 ×4/100 × 6)
= $3800 + (3800 × 4 × 6/100)
= $3800 + (15200 × 6/100)
= $3800 + (91200/100)
= $3800 + $912 = $4712
Thus, Amount (A) to be paid = $4712 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 $3800, the simple interest in 1 year
= 4/100 × 3800
= 4 × 3800/100
= 15200/100 = $152
Thus, simple interest for 1 year = $152
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $152 × 6 = $912
Thus, Simple Interest (SI) = $912
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $912
= $4712
Thus, Amount to be paid = $4712 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $12350 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 7% simple interest for 4 years.
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 8 years.
(4) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) How much loan did Karen borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6842.5 to clear it?
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 8 years.
(7) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.
(8) Richard had to pay $4032 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan.
(10) Nancy had to pay $4772.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.