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) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8820 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 7 years.
(3) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(4) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Richard borrowed a sum of $3600 at 5% simple interest for 4 years.
(6) If Joseph borrowed $3700 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) What amount will be due after 2 years if William borrowed a sum of $3250 at a 4% simple interest?
(8) Betty had to pay $4505 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(10) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.