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) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(2) In how much time a principal of $3150 will amount to $3433.5 at a simple interest of 3% per annum?
(3) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(4) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.
(5) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(6) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8050 to clear it?
(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 4% simple interest?
(8) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 3 years.
(9) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?
(10) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.