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) Joseph had to pay $3922 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) If Mark paid $5104 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 8% simple interest?
(4) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 9% simple interest.
(5) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.
(6) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(7) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(8) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?
(9) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 8 years.
(10) If Donald paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.