Question:
What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?
Correct Answer
$5106
Solution And Explanation
Solution
Given,
Principal (P) = $3450
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) = $3450 × 8% × 6
= $3450 ×8/100 × 6
= 3450 × 8 × 6/100
= 27600 × 6/100
= 165600/100
= $1656
Thus, Simple Interest = $1656
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 = $3450 + $1656
= $5106
Thus, Amount to be paid = $5106 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 = $3450
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3450 + ($3450 × 8% × 6)
= $3450 + ($3450 ×8/100 × 6)
= $3450 + (3450 × 8 × 6/100)
= $3450 + (27600 × 6/100)
= $3450 + (165600/100)
= $3450 + $1656 = $5106
Thus, Amount (A) to be paid = $5106 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 $3450, the simple interest in 1 year
= 8/100 × 3450
= 8 × 3450/100
= 27600/100 = $276
Thus, simple interest for 1 year = $276
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $276 × 6 = $1656
Thus, Simple Interest (SI) = $1656
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3450 + $1656
= $5106
Thus, Amount to be paid = $5106 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 3 years.
(3) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 5% simple interest?
(4) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.
(5) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 5% simple interest?
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 7 years.
(7) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?
(8) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 7% simple interest?
(9) Linda had to pay $3752 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.