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) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 7 years.
(3) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7748 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 4 years.
(5) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.
(6) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(7) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(8) How much loan did Melissa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8085 to clear it?
(9) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 3 years.
(10) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $8360 to clear the loan, then find the time period of the loan.