Question:
What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?
Correct Answer
$4514
Solution And Explanation
Solution
Given,
Principal (P) = $3050
Rate of Simple Interest (SI) = 8%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 6
= $3050 ×8/100 × 6
= 3050 × 8 × 6/100
= 24400 × 6/100
= 146400/100
= $1464
Thus, Simple Interest = $1464
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 + $1464
= $4514
Thus, Amount to be paid = $4514 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) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3050 + ($3050 × 8% × 6)
= $3050 + ($3050 ×8/100 × 6)
= $3050 + (3050 × 8 × 6/100)
= $3050 + (24400 × 6/100)
= $3050 + (146400/100)
= $3050 + $1464 = $4514
Thus, Amount (A) to be paid = $4514 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3050, the simple interest in 1 year
= 8/100 × 3050
= 8 × 3050/100
= 24400/100 = $244
Thus, simple interest for 1 year = $244
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $244 × 6 = $1464
Thus, Simple Interest (SI) = $1464
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3050 + $1464
= $4514
Thus, Amount to be paid = $4514 Answer
Similar Questions
(1) Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 4 years.
(2) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(3) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 3 years.
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 4 years.
(5) How much loan did Melissa borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9187.5 to clear it?
(6) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9512 to clear the loan, then find the time period of the loan.
(8) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 7% simple interest?
(9) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.