Question:
What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 9% simple interest?
Correct Answer
$5929
Solution And Explanation
Solution
Given,
Principal (P) = $3850
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) = $3850 × 9% × 6
= $3850 ×9/100 × 6
= 3850 × 9 × 6/100
= 34650 × 6/100
= 207900/100
= $2079
Thus, Simple Interest = $2079
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 + $2079
= $5929
Thus, Amount to be paid = $5929 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) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3850 + ($3850 × 9% × 6)
= $3850 + ($3850 ×9/100 × 6)
= $3850 + (3850 × 9 × 6/100)
= $3850 + (34650 × 6/100)
= $3850 + (207900/100)
= $3850 + $2079 = $5929
Thus, Amount (A) to be paid = $5929 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 $3850, the simple interest in 1 year
= 9/100 × 3850
= 9 × 3850/100
= 34650/100 = $346.5
Thus, simple interest for 1 year = $346.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $346.5 × 6 = $2079
Thus, Simple Interest (SI) = $2079
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3850 + $2079
= $5929
Thus, Amount to be paid = $5929 Answer
Similar Questions
(1) How much loan did Donna borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8562.5 to clear it?
(2) If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(4) Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 3 years.
(5) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 7% simple interest?
(6) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6392 to clear the loan, then find the time period of the loan.
(7) How much loan did Patricia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6180 to clear it?
(8) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 9% simple interest?
(9) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if James borrowed a sum of $5000 at 2% simple interest for 8 years.