Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 4% simple interest?
Correct Answer
$3968
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 4%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 6
= $3200 ×4/100 × 6
= 3200 × 4 × 6/100
= 12800 × 6/100
= 76800/100
= $768
Thus, Simple Interest = $768
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 + $768
= $3968
Thus, Amount to be paid = $3968 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) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 4% × 6)
= $3200 + ($3200 ×4/100 × 6)
= $3200 + (3200 × 4 × 6/100)
= $3200 + (12800 × 6/100)
= $3200 + (76800/100)
= $3200 + $768 = $3968
Thus, Amount (A) to be paid = $3968 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3200, the simple interest in 1 year
= 4/100 × 3200
= 4 × 3200/100
= 12800/100 = $128
Thus, simple interest for 1 year = $128
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $128 × 6 = $768
Thus, Simple Interest (SI) = $768
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $768
= $3968
Thus, Amount to be paid = $3968 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(2) How much loan did Patricia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5922.5 to clear it?
(3) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(5) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.
(7) If Susan paid $4234 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 9% simple interest?
(9) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3150 will amount to $3780 at a simple interest of 4% per annum?