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) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
(2) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.
(3) If Linda paid $4020 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 7% simple interest?
(5) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8493 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.
(7) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 3% simple interest?
(8) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(9) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 4% simple interest?
(10) 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?