Question:
What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 9% simple interest?
Correct Answer
$6083
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 9% × 6
= $3950 ×9/100 × 6
= 3950 × 9 × 6/100
= 35550 × 6/100
= 213300/100
= $2133
Thus, Simple Interest = $2133
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 = $3950 + $2133
= $6083
Thus, Amount to be paid = $6083 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 = $3950
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3950 + ($3950 × 9% × 6)
= $3950 + ($3950 ×9/100 × 6)
= $3950 + (3950 × 9 × 6/100)
= $3950 + (35550 × 6/100)
= $3950 + (213300/100)
= $3950 + $2133 = $6083
Thus, Amount (A) to be paid = $6083 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 $3950, the simple interest in 1 year
= 9/100 × 3950
= 9 × 3950/100
= 35550/100 = $355.5
Thus, simple interest for 1 year = $355.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $355.5 × 6 = $2133
Thus, Simple Interest (SI) = $2133
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $2133
= $6083
Thus, Amount to be paid = $6083 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $10660 to clear the loan, then find the time period of the loan.
(2) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 5% simple interest?
(3) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(4) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8195 to clear the loan, then find the time period of the loan.
(5) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 4% simple interest?
(6) 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.
(7) If Robert paid $3348 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 9% simple interest.
(10) Elizabeth had to pay $3864 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.