Question:
What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 6% simple interest?
Correct Answer
$5304
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 6% × 6
= $3900 ×6/100 × 6
= 3900 × 6 × 6/100
= 23400 × 6/100
= 140400/100
= $1404
Thus, Simple Interest = $1404
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 = $3900 + $1404
= $5304
Thus, Amount to be paid = $5304 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 = $3900
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3900 + ($3900 × 6% × 6)
= $3900 + ($3900 ×6/100 × 6)
= $3900 + (3900 × 6 × 6/100)
= $3900 + (23400 × 6/100)
= $3900 + (140400/100)
= $3900 + $1404 = $5304
Thus, Amount (A) to be paid = $5304 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 $3900, the simple interest in 1 year
= 6/100 × 3900
= 6 × 3900/100
= 23400/100 = $234
Thus, simple interest for 1 year = $234
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $234 × 6 = $1404
Thus, Simple Interest (SI) = $1404
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $1404
= $5304
Thus, Amount to be paid = $5304 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12127 to clear the loan, then find the time period of the loan.
(2) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(4) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(5) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9900 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 9% simple interest?
(7) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 10% simple interest?
(9) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(10) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 6% simple interest?