Question:
What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 6% simple interest?
Correct Answer
$5168
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 6% × 6
= $3800 ×6/100 × 6
= 3800 × 6 × 6/100
= 22800 × 6/100
= 136800/100
= $1368
Thus, Simple Interest = $1368
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 + $1368
= $5168
Thus, Amount to be paid = $5168 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) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3800 + ($3800 × 6% × 6)
= $3800 + ($3800 ×6/100 × 6)
= $3800 + (3800 × 6 × 6/100)
= $3800 + (22800 × 6/100)
= $3800 + (136800/100)
= $3800 + $1368 = $5168
Thus, Amount (A) to be paid = $5168 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 $3800, the simple interest in 1 year
= 6/100 × 3800
= 6 × 3800/100
= 22800/100 = $228
Thus, simple interest for 1 year = $228
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $228 × 6 = $1368
Thus, Simple Interest (SI) = $1368
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1368
= $5168
Thus, Amount to be paid = $5168 Answer
Similar Questions
(1) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 9% simple interest?
(2) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9943 to clear the loan, then find the time period of the loan.
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 10% simple interest?
(4) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.
(6) If Andrew paid $5376 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 7 years.
(8) 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.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 3 years.
(10) Nancy had to pay $4399 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.