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) Calculate the amount due if Thomas borrowed a sum of $3800 at 3% simple interest for 3 years.
(2) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 8% simple interest.
(3) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?
(5) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(6) How much loan did Jason borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9625 to clear it?
(7) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.
(8) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 7% simple interest.
(9) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 4 years.
(10) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.