Question:
What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 7% simple interest?
Correct Answer
$4331
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 7%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3050 × 7% × 6
= $3050 ×7/100 × 6
= 3050 × 7 × 6/100
= 21350 × 6/100
= 128100/100
= $1281
Thus, Simple Interest = $1281
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 = $3050 + $1281
= $4331
Thus, Amount to be paid = $4331 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 = $3050
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3050 + ($3050 × 7% × 6)
= $3050 + ($3050 ×7/100 × 6)
= $3050 + (3050 × 7 × 6/100)
= $3050 + (21350 × 6/100)
= $3050 + (128100/100)
= $3050 + $1281 = $4331
Thus, Amount (A) to be paid = $4331 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3050, the simple interest in 1 year
= 7/100 × 3050
= 7 × 3050/100
= 21350/100 = $213.5
Thus, simple interest for 1 year = $213.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $213.5 × 6 = $1281
Thus, Simple Interest (SI) = $1281
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $1281
= $4331
Thus, Amount to be paid = $4331 Answer
Similar Questions
(1) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 3 years.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 10% simple interest?
(3) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.
(4) How much loan did Betty borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7187.5 to clear it?
(5) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(6) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 7 years.
(7) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 3 years.
(8) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $8313 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 5% simple interest for 4 years.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 8 years.