Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 2% simple interest?
Correct Answer
$3584
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 2%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 6
= $3200 ×2/100 × 6
= 3200 × 2 × 6/100
= 6400 × 6/100
= 38400/100
= $384
Thus, Simple Interest = $384
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 + $384
= $3584
Thus, Amount to be paid = $3584 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) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 2% × 6)
= $3200 + ($3200 ×2/100 × 6)
= $3200 + (3200 × 2 × 6/100)
= $3200 + (6400 × 6/100)
= $3200 + (38400/100)
= $3200 + $384 = $3584
Thus, Amount (A) to be paid = $3584 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3200, the simple interest in 1 year
= 2/100 × 3200
= 2 × 3200/100
= 6400/100 = $64
Thus, simple interest for 1 year = $64
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $64 × 6 = $384
Thus, Simple Interest (SI) = $384
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $384
= $3584
Thus, Amount to be paid = $3584 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 3 years.
(3) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 9% simple interest?
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 3 years.
(5) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.
(6) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.
(7) What amount does James have to pay after 5 years if he takes a loan of $3000 at 2% simple interest?
(8) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 3 years.
(9) If Matthew paid $4704 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 4 years.