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) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?
(2) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 8% simple interest.
(3) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does David have to pay after 6 years if he takes a loan of $3400 at 5% simple interest?
(5) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 5% simple interest?
(6) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9760 to clear the loan, then find the time period of the loan.
(7) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 4 years.
(9) 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.
(10) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.