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) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(2) How much loan did Joseph borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6840 to clear it?
(3) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6037.5 to clear it?
(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.
(5) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 7 years.
(7) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12670 to clear the loan, then find the time period of the loan.
(8) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(9) In how much time a principal of $3200 will amount to $3456 at a simple interest of 2% per annum?
(10) If Susan paid $4234 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.