Question:
What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
Correct Answer
$4160
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 6%
Time (t) = 5 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% × 5
= $3200 ×6/100 × 5
= 3200 × 6 × 5/100
= 19200 × 5/100
= 96000/100
= $960
Thus, Simple Interest = $960
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 + $960
= $4160
Thus, Amount to be paid = $4160 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) = 5 years
Thus, Amount (A)
= $3200 + ($3200 × 6% × 5)
= $3200 + ($3200 ×6/100 × 5)
= $3200 + (3200 × 6 × 5/100)
= $3200 + (19200 × 5/100)
= $3200 + (96000/100)
= $3200 + $960 = $4160
Thus, Amount (A) to be paid = $4160 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 5 years
= Simple interest for 1 year × 5
= $192 × 5 = $960
Thus, Simple Interest (SI) = $960
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $960
= $4160
Thus, Amount to be paid = $4160 Answer
Similar Questions
(1) Ashley had to pay $4959.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.
(4) If Susan paid $4088 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 8 years.
(6) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 9% simple interest.
(7) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(8) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?
(9) In how much time a principal of $3100 will amount to $3410 at a simple interest of 2% per annum?
(10) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9412 to clear the loan, then find the time period of the loan.