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) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 7 years.
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?
(3) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 3 years.
(5) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $9798 to clear the loan, then find the time period of the loan.
(6) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 3 years.
(8) In how much time a principal of $3100 will amount to $3565 at a simple interest of 5% per annum?
(9) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(10) Susan had to pay $4088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.