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) In how much time a principal of $3200 will amount to $3520 at a simple interest of 5% per annum?
(2) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?
(3) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?
(6) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
(8) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?
(9) If Donald paid $5400 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $10370 to clear the loan, then find the time period of the loan.