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) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 2% simple interest?
(2) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.
(3) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(4) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?
(5) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 5% simple interest.
(6) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(7) In how much time a principal of $3050 will amount to $3324.5 at a simple interest of 3% per annum?
(8) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 3 years.
(10) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $7548 to clear the loan, then find the time period of the loan.