Question:
What amount does David have to pay after 6 years if he takes a loan of $3400 at 9% simple interest?
Correct Answer
$5236
Solution And Explanation
Solution
Given,
Principal (P) = $3400
Rate of Simple Interest (SI) = 9%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3400 × 9% × 6
= $3400 ×9/100 × 6
= 3400 × 9 × 6/100
= 30600 × 6/100
= 183600/100
= $1836
Thus, Simple Interest = $1836
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 = $3400 + $1836
= $5236
Thus, Amount to be paid = $5236 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 = $3400
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3400 + ($3400 × 9% × 6)
= $3400 + ($3400 ×9/100 × 6)
= $3400 + (3400 × 9 × 6/100)
= $3400 + (30600 × 6/100)
= $3400 + (183600/100)
= $3400 + $1836 = $5236
Thus, Amount (A) to be paid = $5236 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3400, the simple interest in 1 year
= 9/100 × 3400
= 9 × 3400/100
= 30600/100 = $306
Thus, simple interest for 1 year = $306
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $306 × 6 = $1836
Thus, Simple Interest (SI) = $1836
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $1836
= $5236
Thus, Amount to be paid = $5236 Answer
Similar Questions
(1) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(3) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(4) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.
(6) How much loan did Nancy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7687.5 to clear it?
(7) What amount does David have to pay after 5 years if he takes a loan of $3400 at 9% simple interest?
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 3 years.
(9) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
(10) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 5% simple interest?