Question:
What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 6% simple interest?
Correct Answer
$4896
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 6% × 6
= $3600 ×6/100 × 6
= 3600 × 6 × 6/100
= 21600 × 6/100
= 129600/100
= $1296
Thus, Simple Interest = $1296
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 = $3600 + $1296
= $4896
Thus, Amount to be paid = $4896 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 = $3600
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3600 + ($3600 × 6% × 6)
= $3600 + ($3600 ×6/100 × 6)
= $3600 + (3600 × 6 × 6/100)
= $3600 + (21600 × 6/100)
= $3600 + (129600/100)
= $3600 + $1296 = $4896
Thus, Amount (A) to be paid = $4896 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 $3600, the simple interest in 1 year
= 6/100 × 3600
= 6 × 3600/100
= 21600/100 = $216
Thus, simple interest for 1 year = $216
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $216 × 6 = $1296
Thus, Simple Interest (SI) = $1296
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1296
= $4896
Thus, Amount to be paid = $4896 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 3 years.
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 8 years.
(3) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Find the amount to be paid if Mary borrowed a sum of $5050 at 6% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.
(6) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(7) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 7 years.
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(9) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(10) How much loan did Donald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8125 to clear it?