Question:
What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?
Correct Answer
$5396
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 7% × 6
= $3800 ×7/100 × 6
= 3800 × 7 × 6/100
= 26600 × 6/100
= 159600/100
= $1596
Thus, Simple Interest = $1596
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 = $3800 + $1596
= $5396
Thus, Amount to be paid = $5396 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 = $3800
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3800 + ($3800 × 7% × 6)
= $3800 + ($3800 ×7/100 × 6)
= $3800 + (3800 × 7 × 6/100)
= $3800 + (26600 × 6/100)
= $3800 + (159600/100)
= $3800 + $1596 = $5396
Thus, Amount (A) to be paid = $5396 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 $3800, the simple interest in 1 year
= 7/100 × 3800
= 7 × 3800/100
= 26600/100 = $266
Thus, simple interest for 1 year = $266
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $266 × 6 = $1596
Thus, Simple Interest (SI) = $1596
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $1596
= $5396
Thus, Amount to be paid = $5396 Answer
Similar Questions
(1) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 3 years.
(2) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 8% simple interest.
(3) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(4) 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.
(5) How much loan did Melissa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8085 to clear it?
(6) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7696 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.
(8) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?
(9) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 6% simple interest?
(10) How much loan did Donna borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7877.5 to clear it?