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) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 3 years.
(2) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 9% simple interest?
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 9% simple interest for 4 years.
(4) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $10140 to clear the loan, then find the time period of the loan.
(5) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.
(6) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 4% simple interest?
(7) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 4% simple interest?
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.
(9) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?