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) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $10640 to clear the loan, then find the time period of the loan.
(2) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 8% simple interest?
(3) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 8 years.
(4) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 8% simple interest?
(5) Richard had to pay $4032 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 9% simple interest?
(7) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 7 years.
(9) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?
(10) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.