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) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7208 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.
(3) If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(4) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9676 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?
(6) How much loan did Ronald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8250 to clear it?
(7) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(8) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.
(9) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8320 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.