Question:
What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 5% simple interest?
Correct Answer
$4680
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 5% × 6
= $3600 ×5/100 × 6
= 3600 × 5 × 6/100
= 18000 × 6/100
= 108000/100
= $1080
Thus, Simple Interest = $1080
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 + $1080
= $4680
Thus, Amount to be paid = $4680 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) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3600 + ($3600 × 5% × 6)
= $3600 + ($3600 ×5/100 × 6)
= $3600 + (3600 × 5 × 6/100)
= $3600 + (18000 × 6/100)
= $3600 + (108000/100)
= $3600 + $1080 = $4680
Thus, Amount (A) to be paid = $4680 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 $3600, the simple interest in 1 year
= 5/100 × 3600
= 5 × 3600/100
= 18000/100 = $180
Thus, simple interest for 1 year = $180
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $180 × 6 = $1080
Thus, Simple Interest (SI) = $1080
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1080
= $4680
Thus, Amount to be paid = $4680 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 2% simple interest?
(2) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.
(4) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 7 years.
(6) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9387 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if William borrowed a sum of $3500 at 8% simple interest for 4 years.
(8) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 8% simple interest?
(9) What amount will be due after 2 years if John borrowed a sum of $3100 at a 10% simple interest?
(10) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?