Question:
What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?
Correct Answer
$4940
Solution And Explanation
Solution
Given,
Principal (P) = $3800
Rate of Simple Interest (SI) = 5%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 6
= $3800 ×5/100 × 6
= 3800 × 5 × 6/100
= 19000 × 6/100
= 114000/100
= $1140
Thus, Simple Interest = $1140
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 + $1140
= $4940
Thus, Amount to be paid = $4940 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) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3800 + ($3800 × 5% × 6)
= $3800 + ($3800 ×5/100 × 6)
= $3800 + (3800 × 5 × 6/100)
= $3800 + (19000 × 6/100)
= $3800 + (114000/100)
= $3800 + $1140 = $4940
Thus, Amount (A) to be paid = $4940 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3800, the simple interest in 1 year
= 5/100 × 3800
= 5 × 3800/100
= 19000/100 = $190
Thus, simple interest for 1 year = $190
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $190 × 6 = $1140
Thus, Simple Interest (SI) = $1140
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1140
= $4940
Thus, Amount to be paid = $4940 Answer
Similar Questions
(1) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5995 to clear it?
(3) How much loan did Sharon borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9300 to clear it?
(4) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 7 years.
(6) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 7 years.
(8) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?
(9) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 7 years.
(10) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10360 to clear the loan, then find the time period of the loan.