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) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 7% simple interest.
(2) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 4% simple interest.
(3) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(4) How much loan did Thomas borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6960 to clear it?
(5) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.
(8) What amount will be due after 2 years if David borrowed a sum of $3200 at a 6% simple interest?
(9) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 10% simple interest?
(10) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.