Question:
What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?
Correct Answer
$4760
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 6%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $3500 × 6% × 6
= $3500 ×6/100 × 6
= 3500 × 6 × 6/100
= 21000 × 6/100
= 126000/100
= $1260
Thus, Simple Interest = $1260
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 = $3500 + $1260
= $4760
Thus, Amount to be paid = $4760 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 = $3500
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3500 + ($3500 × 6% × 6)
= $3500 + ($3500 ×6/100 × 6)
= $3500 + (3500 × 6 × 6/100)
= $3500 + (21000 × 6/100)
= $3500 + (126000/100)
= $3500 + $1260 = $4760
Thus, Amount (A) to be paid = $4760 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3500, the simple interest in 1 year
= 6/100 × 3500
= 6 × 3500/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $210 × 6 = $1260
Thus, Simple Interest (SI) = $1260
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $1260
= $4760
Thus, Amount to be paid = $4760 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(2) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10332 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?
(4) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.
(5) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 4 years.
(7) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6037.5 to clear it?
(8) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $9460 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.
(10) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 3 years.