Question:
What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 5% simple interest?
Correct Answer
$5005
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 5% × 6
= $3850 ×5/100 × 6
= 3850 × 5 × 6/100
= 19250 × 6/100
= 115500/100
= $1155
Thus, Simple Interest = $1155
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 + $1155
= $5005
Thus, Amount to be paid = $5005 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) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3850 + ($3850 × 5% × 6)
= $3850 + ($3850 ×5/100 × 6)
= $3850 + (3850 × 5 × 6/100)
= $3850 + (19250 × 6/100)
= $3850 + (115500/100)
= $3850 + $1155 = $5005
Thus, Amount (A) to be paid = $5005 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 $3850, the simple interest in 1 year
= 5/100 × 3850
= 5 × 3850/100
= 19250/100 = $192.5
Thus, simple interest for 1 year = $192.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $192.5 × 6 = $1155
Thus, Simple Interest (SI) = $1155
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $1155
= $5005
Thus, Amount to be paid = $5005 Answer
Similar Questions
(1) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9834 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 8 years.
(3) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
(4) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?
(5) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 8 years.
(6) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 8% simple interest?
(7) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7208 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(9) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) If Joseph paid $4144 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.