Question:
What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 6% simple interest?
Correct Answer
$5372
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 6% × 6
= $3950 ×6/100 × 6
= 3950 × 6 × 6/100
= 23700 × 6/100
= 142200/100
= $1422
Thus, Simple Interest = $1422
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 = $3950 + $1422
= $5372
Thus, Amount to be paid = $5372 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 = $3950
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3950 + ($3950 × 6% × 6)
= $3950 + ($3950 ×6/100 × 6)
= $3950 + (3950 × 6 × 6/100)
= $3950 + (23700 × 6/100)
= $3950 + (142200/100)
= $3950 + $1422 = $5372
Thus, Amount (A) to be paid = $5372 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 $3950, the simple interest in 1 year
= 6/100 × 3950
= 6 × 3950/100
= 23700/100 = $237
Thus, simple interest for 1 year = $237
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $237 × 6 = $1422
Thus, Simple Interest (SI) = $1422
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $1422
= $5372
Thus, Amount to be paid = $5372 Answer
Similar Questions
(1) If Barbara borrowed $3550 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 3% simple interest?
(3) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.
(4) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 3 years.
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 10% simple interest for 7 years.
(8) What amount does James have to pay after 6 years if he takes a loan of $3000 at 8% simple interest?
(9) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.