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 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.
(2) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 9% simple interest?
(3) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?
(4) Christopher had to pay $4480 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 5% simple interest?
(6) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?
(7) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 8 years.
(10) If Lisa paid $4374 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.