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) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 6% simple interest?
(2) Find the amount to be paid if Christopher borrowed a sum of $6000 at 10% simple interest for 7 years.
(3) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $12200 to clear the loan, then find the time period of the loan.
(4) Matthew had to pay $4830 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?
(7) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 7% simple interest?
(8) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 8 years.
(10) If Joshua paid $5488 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.