Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?
Correct Answer
$4030
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 4% × 6
= $3250 ×4/100 × 6
= 3250 × 4 × 6/100
= 13000 × 6/100
= 78000/100
= $780
Thus, Simple Interest = $780
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 = $3250 + $780
= $4030
Thus, Amount to be paid = $4030 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 = $3250
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 4% × 6)
= $3250 + ($3250 ×4/100 × 6)
= $3250 + (3250 × 4 × 6/100)
= $3250 + (13000 × 6/100)
= $3250 + (78000/100)
= $3250 + $780 = $4030
Thus, Amount (A) to be paid = $4030 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 $3250, the simple interest in 1 year
= 4/100 × 3250
= 4 × 3250/100
= 13000/100 = $130
Thus, simple interest for 1 year = $130
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $130 × 6 = $780
Thus, Simple Interest (SI) = $780
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $780
= $4030
Thus, Amount to be paid = $4030 Answer
Similar Questions
(1) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.
(2) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?
(3) What amount will be due after 2 years if William borrowed a sum of $3250 at a 10% simple interest?
(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.
(5) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(6) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(7) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8970 to clear it?
(8) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.
(9) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.