Question:
What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 4% simple interest?
Correct Answer
$4836
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 4% × 6
= $3900 ×4/100 × 6
= 3900 × 4 × 6/100
= 15600 × 6/100
= 93600/100
= $936
Thus, Simple Interest = $936
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 = $3900 + $936
= $4836
Thus, Amount to be paid = $4836 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 = $3900
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3900 + ($3900 × 4% × 6)
= $3900 + ($3900 ×4/100 × 6)
= $3900 + (3900 × 4 × 6/100)
= $3900 + (15600 × 6/100)
= $3900 + (93600/100)
= $3900 + $936 = $4836
Thus, Amount (A) to be paid = $4836 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 $3900, the simple interest in 1 year
= 4/100 × 3900
= 4 × 3900/100
= 15600/100 = $156
Thus, simple interest for 1 year = $156
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $156 × 6 = $936
Thus, Simple Interest (SI) = $936
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $936
= $4836
Thus, Amount to be paid = $4836 Answer
Similar Questions
(1) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 8 years.
(2) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $13400 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Richard borrowed a sum of $3600 at 10% simple interest for 4 years.
(4) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 3 years.
(5) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(6) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?
(7) If Andrew paid $5376 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?
(9) If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.