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) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?
(2) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
(3) How much loan did David borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6210 to clear it?
(4) Ashley had to pay $5096 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9840 to clear the loan, then find the time period of the loan.
(6) If Betty paid $5100 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(8) Donald had to pay $5040 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.
(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.