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 8% simple interest for 3 years.
(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.
(3) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.
(4) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(5) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $8732 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 7% simple interest?
(7) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3150 will amount to $3339 at a simple interest of 2% per annum?
(9) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 3% simple interest?
(10) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.