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) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 5% simple interest?
(2) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.
(3) What amount does James have to pay after 6 years if he takes a loan of $3000 at 4% simple interest?
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.
(6) Richard had to pay $3816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) How much loan did Christopher borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7200 to clear it?
(8) If Mary borrowed $3050 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) If Daniel paid $4428 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 4% simple interest?