Question:
What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 4% simple interest?
Correct Answer
$4464
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 4% × 6
= $3600 ×4/100 × 6
= 3600 × 4 × 6/100
= 14400 × 6/100
= 86400/100
= $864
Thus, Simple Interest = $864
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 = $3600 + $864
= $4464
Thus, Amount to be paid = $4464 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 = $3600
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3600 + ($3600 × 4% × 6)
= $3600 + ($3600 ×4/100 × 6)
= $3600 + (3600 × 4 × 6/100)
= $3600 + (14400 × 6/100)
= $3600 + (86400/100)
= $3600 + $864 = $4464
Thus, Amount (A) to be paid = $4464 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 $3600, the simple interest in 1 year
= 4/100 × 3600
= 4 × 3600/100
= 14400/100 = $144
Thus, simple interest for 1 year = $144
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $144 × 6 = $864
Thus, Simple Interest (SI) = $864
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $864
= $4464
Thus, Amount to be paid = $4464 Answer
Similar Questions
(1) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.
(2) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 6% simple interest?
(3) What amount will be due after 2 years if William borrowed a sum of $3250 at a 7% simple interest?
(4) Find the amount to be paid if David borrowed a sum of $5400 at 6% simple interest for 7 years.
(5) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(6) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.
(7) How much loan did Michael borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6360 to clear it?
(8) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
(9) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) If Kimberly paid $5580 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.