Question:
What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?
Correct Answer
$4774
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 4% × 6
= $3850 ×4/100 × 6
= 3850 × 4 × 6/100
= 15400 × 6/100
= 92400/100
= $924
Thus, Simple Interest = $924
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 = $3850 + $924
= $4774
Thus, Amount to be paid = $4774 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 = $3850
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3850 + ($3850 × 4% × 6)
= $3850 + ($3850 ×4/100 × 6)
= $3850 + (3850 × 4 × 6/100)
= $3850 + (15400 × 6/100)
= $3850 + (92400/100)
= $3850 + $924 = $4774
Thus, Amount (A) to be paid = $4774 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 $3850, the simple interest in 1 year
= 4/100 × 3850
= 4 × 3850/100
= 15400/100 = $154
Thus, simple interest for 1 year = $154
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $154 × 6 = $924
Thus, Simple Interest (SI) = $924
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $924
= $4774
Thus, Amount to be paid = $4774 Answer
Similar Questions
(1) In how much time a principal of $3100 will amount to $3348 at a simple interest of 4% per annum?
(2) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 2% simple interest?
(3) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.
(4) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 8 years.
(7) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 9% simple interest?
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 8 years.
(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 3 years.
(10) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.