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) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 3 years.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 4 years.
(3) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.
(4) In how much time a principal of $3100 will amount to $3720 at a simple interest of 4% per annum?
(5) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
(6) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(7) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(8) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 3% simple interest?
(9) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $9984 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Robert borrowed a sum of $3100 at 6% simple interest for 4 years.