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) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10824 to clear the loan, then find the time period of the loan.
(2) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.
(4) In how much time a principal of $3100 will amount to $3472 at a simple interest of 3% per annum?
(5) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) In how much time a principal of $3000 will amount to $3300 at a simple interest of 5% per annum?
(8) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 7% simple interest?
(9) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?
(10) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 6% simple interest?