Question:
What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 6% simple interest?
Correct Answer
$5032
Solution And Explanation
Solution
Given,
Principal (P) = $3700
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) = $3700 × 6% × 6
= $3700 ×6/100 × 6
= 3700 × 6 × 6/100
= 22200 × 6/100
= 133200/100
= $1332
Thus, Simple Interest = $1332
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 = $3700 + $1332
= $5032
Thus, Amount to be paid = $5032 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 = $3700
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3700 + ($3700 × 6% × 6)
= $3700 + ($3700 ×6/100 × 6)
= $3700 + (3700 × 6 × 6/100)
= $3700 + (22200 × 6/100)
= $3700 + (133200/100)
= $3700 + $1332 = $5032
Thus, Amount (A) to be paid = $5032 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 $3700, the simple interest in 1 year
= 6/100 × 3700
= 6 × 3700/100
= 22200/100 = $222
Thus, simple interest for 1 year = $222
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $222 × 6 = $1332
Thus, Simple Interest (SI) = $1332
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1332
= $5032
Thus, Amount to be paid = $5032 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 3 years.
(3) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 5% simple interest?
(4) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 4 years.
(5) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8305 to clear it?
(6) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8682.5 to clear it?
(7) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 10% simple interest?
(8) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
(10) If John paid $3584 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.