Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 5% simple interest?
Correct Answer
$4160
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 5%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3200 × 5% × 6
= $3200 ×5/100 × 6
= 3200 × 5 × 6/100
= 16000 × 6/100
= 96000/100
= $960
Thus, Simple Interest = $960
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 = $3200 + $960
= $4160
Thus, Amount to be paid = $4160 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 = $3200
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 5% × 6)
= $3200 + ($3200 ×5/100 × 6)
= $3200 + (3200 × 5 × 6/100)
= $3200 + (16000 × 6/100)
= $3200 + (96000/100)
= $3200 + $960 = $4160
Thus, Amount (A) to be paid = $4160 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3200, the simple interest in 1 year
= 5/100 × 3200
= 5 × 3200/100
= 16000/100 = $160
Thus, simple interest for 1 year = $160
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $160 × 6 = $960
Thus, Simple Interest (SI) = $960
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $960
= $4160
Thus, Amount to be paid = $4160 Answer
Similar Questions
(1) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3050 will amount to $3355 at a simple interest of 2% per annum?
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?
(4) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $12400 to clear the loan, then find the time period of the loan.
(5) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.
(6) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 4 years.
(8) In how much time a principal of $3050 will amount to $3660 at a simple interest of 4% per annum?
(9) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(10) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 3% simple interest?