Question:
What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 7% simple interest?
Correct Answer
$5609
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 7% × 6
= $3950 ×7/100 × 6
= 3950 × 7 × 6/100
= 27650 × 6/100
= 165900/100
= $1659
Thus, Simple Interest = $1659
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 = $3950 + $1659
= $5609
Thus, Amount to be paid = $5609 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 = $3950
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3950 + ($3950 × 7% × 6)
= $3950 + ($3950 ×7/100 × 6)
= $3950 + (3950 × 7 × 6/100)
= $3950 + (27650 × 6/100)
= $3950 + (165900/100)
= $3950 + $1659 = $5609
Thus, Amount (A) to be paid = $5609 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 $3950, the simple interest in 1 year
= 7/100 × 3950
= 7 × 3950/100
= 27650/100 = $276.5
Thus, simple interest for 1 year = $276.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $276.5 × 6 = $1659
Thus, Simple Interest (SI) = $1659
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $1659
= $5609
Thus, Amount to be paid = $5609 Answer
Similar Questions
(1) In how much time a principal of $3150 will amount to $3528 at a simple interest of 3% per annum?
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 3 years.
(3) If Steven paid $5336 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 4 years.
(5) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 5% simple interest.
(6) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 10% simple interest?
(7) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(8) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8436 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 4 years.
(10) In how much time a principal of $3050 will amount to $3294 at a simple interest of 4% per annum?