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) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 5% simple interest.
(3) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 8% simple interest?
(5) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 5% simple interest.
(6) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $8704 to clear the loan, then find the time period of the loan.
(7) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?
(8) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 8 years.
(10) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.