Question:
What amount does William have to pay after 6 years if he takes a loan of $3500 at 10% simple interest?
Correct Answer
$5600
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 10%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $3500 × 10% × 6
= $3500 ×10/100 × 6
= 3500 × 10 × 6/100
= 35000 × 6/100
= 210000/100
= $2100
Thus, Simple Interest = $2100
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 = $3500 + $2100
= $5600
Thus, Amount to be paid = $5600 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 = $3500
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3500 + ($3500 × 10% × 6)
= $3500 + ($3500 ×10/100 × 6)
= $3500 + (3500 × 10 × 6/100)
= $3500 + (35000 × 6/100)
= $3500 + (210000/100)
= $3500 + $2100 = $5600
Thus, Amount (A) to be paid = $5600 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3500, the simple interest in 1 year
= 10/100 × 3500
= 10 × 3500/100
= 35000/100 = $350
Thus, simple interest for 1 year = $350
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $350 × 6 = $2100
Thus, Simple Interest (SI) = $2100
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $2100
= $5600
Thus, Amount to be paid = $5600 Answer
Similar Questions
(1) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 6% simple interest?
(2) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 7 years.
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 4 years.
(5) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 3 years.
(6) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(7) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(8) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.
(9) If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) If David paid $4080 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.