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) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $7752 to clear the loan, then find the time period of the loan.
(2) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8568 to clear the loan, then find the time period of the loan.
(3) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(4) How much loan did Ashley borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7205 to clear it?
(5) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 3% simple interest?
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 4 years.
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 4 years.
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.
(9) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 4% simple interest.
(10) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $8436 to clear the loan, then find the time period of the loan.