Question:
( 1 of 10 ) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$3800
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 after 10 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.
(2) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10452 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 4 years.
(4) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 7 years.
(6) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 2% simple interest?
(7) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 3% simple interest?
(8) How much loan did Matthew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7440 to clear it?
(9) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?
(10) If Ashley paid $4914 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.