Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 2% simple interest?
Correct Answer
$3640
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 2% × 6
= $3250 ×2/100 × 6
= 3250 × 2 × 6/100
= 6500 × 6/100
= 39000/100
= $390
Thus, Simple Interest = $390
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 = $3250 + $390
= $3640
Thus, Amount to be paid = $3640 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 = $3250
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 2% × 6)
= $3250 + ($3250 ×2/100 × 6)
= $3250 + (3250 × 2 × 6/100)
= $3250 + (6500 × 6/100)
= $3250 + (39000/100)
= $3250 + $390 = $3640
Thus, Amount (A) to be paid = $3640 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 $3250, the simple interest in 1 year
= 2/100 × 3250
= 2 × 3250/100
= 6500/100 = $65
Thus, simple interest for 1 year = $65
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $65 × 6 = $390
Thus, Simple Interest (SI) = $390
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $390
= $3640
Thus, Amount to be paid = $3640 Answer
Similar Questions
(1) How much loan did William borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6875 to clear it?
(2) 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.
(3) Calculate the amount due if Patricia borrowed a sum of $3150 at 6% simple interest for 4 years.
(4) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.
(6) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(7) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(8) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6267.5 to clear it?
(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.
(10) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.