Question:
What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 10% simple interest?
Correct Answer
$6320
Solution And Explanation
Solution
Given,
Principal (P) = $3950
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) = $3950 × 10% × 6
= $3950 ×10/100 × 6
= 3950 × 10 × 6/100
= 39500 × 6/100
= 237000/100
= $2370
Thus, Simple Interest = $2370
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 = $3950 + $2370
= $6320
Thus, Amount to be paid = $6320 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 = $3950
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3950 + ($3950 × 10% × 6)
= $3950 + ($3950 ×10/100 × 6)
= $3950 + (3950 × 10 × 6/100)
= $3950 + (39500 × 6/100)
= $3950 + (237000/100)
= $3950 + $2370 = $6320
Thus, Amount (A) to be paid = $6320 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 $3950, the simple interest in 1 year
= 10/100 × 3950
= 10 × 3950/100
= 39500/100 = $395
Thus, simple interest for 1 year = $395
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $395 × 6 = $2370
Thus, Simple Interest (SI) = $2370
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3950 + $2370
= $6320
Thus, Amount to be paid = $6320 Answer
Similar Questions
(1) What amount will be due after 2 years if William borrowed a sum of $3250 at a 9% simple interest?
(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 8 years.
(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.
(4) If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 3 years.
(7) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 3% per annum?
(8) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 4 years.
(9) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 7% simple interest.
(10) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.