Question:
What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 7% simple interest?
Correct Answer
$4899
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 7% × 6
= $3450 ×7/100 × 6
= 3450 × 7 × 6/100
= 24150 × 6/100
= 144900/100
= $1449
Thus, Simple Interest = $1449
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 = $3450 + $1449
= $4899
Thus, Amount to be paid = $4899 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 = $3450
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3450 + ($3450 × 7% × 6)
= $3450 + ($3450 ×7/100 × 6)
= $3450 + (3450 × 7 × 6/100)
= $3450 + (24150 × 6/100)
= $3450 + (144900/100)
= $3450 + $1449 = $4899
Thus, Amount (A) to be paid = $4899 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 $3450, the simple interest in 1 year
= 7/100 × 3450
= 7 × 3450/100
= 24150/100 = $241.5
Thus, simple interest for 1 year = $241.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $241.5 × 6 = $1449
Thus, Simple Interest (SI) = $1449
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $1449
= $4899
Thus, Amount to be paid = $4899 Answer
Similar Questions
(1) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.
(2) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(3) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(4) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?
(5) If Jennifer paid $3510 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 3 years.
(8) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12308 to clear the loan, then find the time period of the loan.
(9) If Charles paid $4368 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.