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) Donna had to pay $5286.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 3 years.
(4) If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(6) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9536 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3200 will amount to $3456 at a simple interest of 4% per annum?
(8) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.
(9) If Sandra paid $5162 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) How much loan did Betty borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7500 to clear it?