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 will be due after 2 years if Steven borrowed a sum of $3800 at a 6% simple interest?
(2) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 3 years.
(3) How much loan did Donna borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8562.5 to clear it?
(4) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 5% simple interest?
(5) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 8% simple interest?
(6) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.
(7) If Christopher borrowed $4000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 6% simple interest.
(9) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $9720 to clear the loan, then find the time period of the loan.
(10) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?