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) In how much time a principal of $3150 will amount to $3780 at a simple interest of 5% per annum?
(2) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(3) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
(4) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(5) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9702 to clear the loan, then find the time period of the loan.
(6) If Mary paid $3294 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 8% simple interest?
(8) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(10) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 3 years.