Question:
What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 6% simple interest?
Correct Answer
$5236
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 6% × 6
= $3850 ×6/100 × 6
= 3850 × 6 × 6/100
= 23100 × 6/100
= 138600/100
= $1386
Thus, Simple Interest = $1386
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 + $1386
= $5236
Thus, Amount to be paid = $5236 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) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3850 + ($3850 × 6% × 6)
= $3850 + ($3850 ×6/100 × 6)
= $3850 + (3850 × 6 × 6/100)
= $3850 + (23100 × 6/100)
= $3850 + (138600/100)
= $3850 + $1386 = $5236
Thus, Amount (A) to be paid = $5236 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 $3850, the simple interest in 1 year
= 6/100 × 3850
= 6 × 3850/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $231 × 6 = $1386
Thus, Simple Interest (SI) = $1386
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $1386
= $5236
Thus, Amount to be paid = $5236 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 4 years.
(2) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(3) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.
(4) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 9% simple interest?
(5) If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
(7) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 10% simple interest?
(8) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?
(9) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 9% simple interest?
(10) How much loan did Edward borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8360 to clear it?