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 Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.
(2) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 10% simple interest?
(3) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?
(4) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(5) Joseph had to pay $4255 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 3 years.
(7) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6724 to clear the loan, then find the time period of the loan.
(8) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(9) If Barbara paid $3834 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) What amount will be due after 2 years if David borrowed a sum of $3200 at a 5% simple interest?