Question:
What amount does James have to pay after 6 years if he takes a loan of $3000 at 6% simple interest?
Correct Answer
$4080
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 6%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $3000 × 6% × 6
= $3000 ×6/100 × 6
= 3000 × 6 × 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 = $3000 + $1080
= $4080
Thus, Amount to be paid = $4080 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 = $3000
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3000 + ($3000 × 6% × 6)
= $3000 + ($3000 ×6/100 × 6)
= $3000 + (3000 × 6 × 6/100)
= $3000 + (18000 × 6/100)
= $3000 + (108000/100)
= $3000 + $1080 = $4080
Thus, Amount (A) to be paid = $4080 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3000, the simple interest in 1 year
= 6/100 × 3000
= 6 × 3000/100
= 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 = $3000 + $1080
= $4080
Thus, Amount to be paid = $4080 Answer
Similar Questions
(1) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 4% simple interest?
(2) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?
(3) Anthony had to pay $4816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 8 years.
(5) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(6) How much loan did Jacob borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $10000 to clear it?
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.
(8) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 2% simple interest?
(9) In how much time a principal of $3000 will amount to $3240 at a simple interest of 4% per annum?
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.