Question:
What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?
Correct Answer
$6240
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 10% × 6
= $3900 ×10/100 × 6
= 3900 × 10 × 6/100
= 39000 × 6/100
= 234000/100
= $2340
Thus, Simple Interest = $2340
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 = $3900 + $2340
= $6240
Thus, Amount to be paid = $6240 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 = $3900
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3900 + ($3900 × 10% × 6)
= $3900 + ($3900 ×10/100 × 6)
= $3900 + (3900 × 10 × 6/100)
= $3900 + (39000 × 6/100)
= $3900 + (234000/100)
= $3900 + $2340 = $6240
Thus, Amount (A) to be paid = $6240 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 $3900, the simple interest in 1 year
= 10/100 × 3900
= 10 × 3900/100
= 39000/100 = $390
Thus, simple interest for 1 year = $390
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $390 × 6 = $2340
Thus, Simple Interest (SI) = $2340
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $2340
= $6240
Thus, Amount to be paid = $6240 Answer
Similar Questions
(1) If Susan paid $4234 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.
(3) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(5) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(6) Donna had to pay $5141 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Sandra had to pay $5117.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Betty had to pay $4632.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 4% simple interest for 7 years.