Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 6% simple interest?
Correct Answer
$4352
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 6% × 6
= $3200 ×6/100 × 6
= 3200 × 6 × 6/100
= 19200 × 6/100
= 115200/100
= $1152
Thus, Simple Interest = $1152
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 + $1152
= $4352
Thus, Amount to be paid = $4352 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) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 6% × 6)
= $3200 + ($3200 ×6/100 × 6)
= $3200 + (3200 × 6 × 6/100)
= $3200 + (19200 × 6/100)
= $3200 + (115200/100)
= $3200 + $1152 = $4352
Thus, Amount (A) to be paid = $4352 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 $3200, the simple interest in 1 year
= 6/100 × 3200
= 6 × 3200/100
= 19200/100 = $192
Thus, simple interest for 1 year = $192
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $192 × 6 = $1152
Thus, Simple Interest (SI) = $1152
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1152
= $4352
Thus, Amount to be paid = $4352 Answer
Similar Questions
(1) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9184 to clear the loan, then find the time period of the loan.
(2) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(3) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 3% simple interest?
(4) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(5) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.
(6) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 4% simple interest?
(8) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(9) Mary had to pay $3507.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) How much loan did Robert borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6120 to clear it?