Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?
Correct Answer
$3776
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 3%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 6
= $3200 ×3/100 × 6
= 3200 × 3 × 6/100
= 9600 × 6/100
= 57600/100
= $576
Thus, Simple Interest = $576
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 + $576
= $3776
Thus, Amount to be paid = $3776 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) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 3% × 6)
= $3200 + ($3200 ×3/100 × 6)
= $3200 + (3200 × 3 × 6/100)
= $3200 + (9600 × 6/100)
= $3200 + (57600/100)
= $3200 + $576 = $3776
Thus, Amount (A) to be paid = $3776 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3200, the simple interest in 1 year
= 3/100 × 3200
= 3 × 3200/100
= 9600/100 = $96
Thus, simple interest for 1 year = $96
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $96 × 6 = $576
Thus, Simple Interest (SI) = $576
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $576
= $3776
Thus, Amount to be paid = $3776 Answer
Similar Questions
(1) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 7 years.
(2) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 8% simple interest?
(3) David had to pay $3706 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) How much loan did Carol borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8107.5 to clear it?
(5) How much loan did Linda borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6687.5 to clear it?
(6) Nancy had to pay $4523.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.
(8) How much loan did Thomas borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6380 to clear it?
(9) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.