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) Thomas had to pay $4256 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 7 years.
(3) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 9% simple interest.
(4) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(6) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
(7) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 6% simple interest.
(8) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 4% simple interest?
(9) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 8 years.
(10) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.