Question:
What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 8% simple interest?
Correct Answer
$5698
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 8% × 6
= $3850 ×8/100 × 6
= 3850 × 8 × 6/100
= 30800 × 6/100
= 184800/100
= $1848
Thus, Simple Interest = $1848
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 = $3850 + $1848
= $5698
Thus, Amount to be paid = $5698 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 = $3850
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3850 + ($3850 × 8% × 6)
= $3850 + ($3850 ×8/100 × 6)
= $3850 + (3850 × 8 × 6/100)
= $3850 + (30800 × 6/100)
= $3850 + (184800/100)
= $3850 + $1848 = $5698
Thus, Amount (A) to be paid = $5698 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 $3850, the simple interest in 1 year
= 8/100 × 3850
= 8 × 3850/100
= 30800/100 = $308
Thus, simple interest for 1 year = $308
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $308 × 6 = $1848
Thus, Simple Interest (SI) = $1848
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $1848
= $5698
Thus, Amount to be paid = $5698 Answer
Similar Questions
(1) What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?
(2) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(3) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 8 years.
(4) Find the amount to be paid if Charles borrowed a sum of $5900 at 9% simple interest for 7 years.
(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 5% simple interest?
(6) How much loan did Daniel borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7625 to clear it?
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 7% simple interest for 7 years.
(8) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(9) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(10) If Paul paid $5076 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.