Question:
Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 4 years.
Correct Answer
$3968
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 6%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $3200 × 6% × 4
= $3200 ×6/100 × 4
= 3200 × 6 × 4/100
= 19200 × 4/100
= 76800/100
= $768
Thus, Simple Interest = $768
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 = $3200 + $768
= $3968
Thus, Amount to be paid = $3968 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 = $3200
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3200 + ($3200 × 6% × 4)
= $3200 + ($3200 ×6/100 × 4)
= $3200 + (3200 × 6 × 4/100)
= $3200 + (19200 × 4/100)
= $3200 + (76800/100)
= $3200 + $768 = $3968
Thus, Amount (A) to be paid = $3968 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3200, the simple interest in 1 year
= 6/100 × 3200
= 6 × 3200/100
= 19200/100 = $192
Thus, simple interest for 1 year = $192
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $192 × 4 = $768
Thus, Simple Interest (SI) = $768
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $768
= $3968
Thus, Amount to be paid = $3968 Answer
Similar Questions
(1) Daniel had to pay $4346 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 7 years.
(3) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(4) If Steven paid $5520 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 7 years.
(7) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.
(9) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(10) Joshua had to pay $5194 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.