Question:
What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 10% simple interest?
Correct Answer
$6080
Solution And Explanation
Solution
Given,
Principal (P) = $3800
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) = $3800 × 10% × 6
= $3800 ×10/100 × 6
= 3800 × 10 × 6/100
= 38000 × 6/100
= 228000/100
= $2280
Thus, Simple Interest = $2280
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 = $3800 + $2280
= $6080
Thus, Amount to be paid = $6080 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 = $3800
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3800 + ($3800 × 10% × 6)
= $3800 + ($3800 ×10/100 × 6)
= $3800 + (3800 × 10 × 6/100)
= $3800 + (38000 × 6/100)
= $3800 + (228000/100)
= $3800 + $2280 = $6080
Thus, Amount (A) to be paid = $6080 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 $3800, the simple interest in 1 year
= 10/100 × 3800
= 10 × 3800/100
= 38000/100 = $380
Thus, simple interest for 1 year = $380
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $380 × 6 = $2280
Thus, Simple Interest (SI) = $2280
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3800 + $2280
= $6080
Thus, Amount to be paid = $6080 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 10% simple interest?
(2) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(4) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(5) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.
(6) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 6% simple interest.
(8) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $10432 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 7 years.
(10) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6512 to clear the loan, then find the time period of the loan.