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) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.
(2) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?
(3) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?
(4) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 8 years.
(6) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 7 years.
(7) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(8) Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 7 years.
(9) In how much time a principal of $3200 will amount to $3680 at a simple interest of 5% per annum?
(10) How much loan did John borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6500 to clear it?