Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 6% simple interest?
Correct Answer
$4420
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 6% × 6
= $3250 ×6/100 × 6
= 3250 × 6 × 6/100
= 19500 × 6/100
= 117000/100
= $1170
Thus, Simple Interest = $1170
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 = $3250 + $1170
= $4420
Thus, Amount to be paid = $4420 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 = $3250
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 6% × 6)
= $3250 + ($3250 ×6/100 × 6)
= $3250 + (3250 × 6 × 6/100)
= $3250 + (19500 × 6/100)
= $3250 + (117000/100)
= $3250 + $1170 = $4420
Thus, Amount (A) to be paid = $4420 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 $3250, the simple interest in 1 year
= 6/100 × 3250
= 6 × 3250/100
= 19500/100 = $195
Thus, simple interest for 1 year = $195
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $195 × 6 = $1170
Thus, Simple Interest (SI) = $1170
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1170
= $4420
Thus, Amount to be paid = $4420 Answer
Similar Questions
(1) Sandra had to pay $4850.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 3 years.
(3) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 8 years.
(5) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 4 years.
(6) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
(7) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.
(8) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 3 years.
(10) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 8 years.