Question:
What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
Correct Answer
$4032
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 2% × 6
= $3600 ×2/100 × 6
= 3600 × 2 × 6/100
= 7200 × 6/100
= 43200/100
= $432
Thus, Simple Interest = $432
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 = $3600 + $432
= $4032
Thus, Amount to be paid = $4032 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 = $3600
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3600 + ($3600 × 2% × 6)
= $3600 + ($3600 ×2/100 × 6)
= $3600 + (3600 × 2 × 6/100)
= $3600 + (7200 × 6/100)
= $3600 + (43200/100)
= $3600 + $432 = $4032
Thus, Amount (A) to be paid = $4032 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 $3600, the simple interest in 1 year
= 2/100 × 3600
= 2 × 3600/100
= 7200/100 = $72
Thus, simple interest for 1 year = $72
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $72 × 6 = $432
Thus, Simple Interest (SI) = $432
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $432
= $4032
Thus, Amount to be paid = $4032 Answer
Similar Questions
(1) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9774 to clear the loan, then find the time period of the loan.
(2) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 10% simple interest?
(3) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(4) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 3 years.
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 8 years.
(7) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 8 years.
(8) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 5% simple interest?
(9) 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.
(10) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?