Question:
What amount does James have to pay after 6 years if he takes a loan of $3000 at 7% simple interest?
Correct Answer
$4260
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 7%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3000 × 7% × 6
= $3000 ×7/100 × 6
= 3000 × 7 × 6/100
= 21000 × 6/100
= 126000/100
= $1260
Thus, Simple Interest = $1260
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 = $3000 + $1260
= $4260
Thus, Amount to be paid = $4260 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 = $3000
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3000 + ($3000 × 7% × 6)
= $3000 + ($3000 ×7/100 × 6)
= $3000 + (3000 × 7 × 6/100)
= $3000 + (21000 × 6/100)
= $3000 + (126000/100)
= $3000 + $1260 = $4260
Thus, Amount (A) to be paid = $4260 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3000, the simple interest in 1 year
= 7/100 × 3000
= 7 × 3000/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $210 × 6 = $1260
Thus, Simple Interest (SI) = $1260
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $1260
= $4260
Thus, Amount to be paid = $4260 Answer
Similar Questions
(1) Find the amount to be paid if James borrowed a sum of $5000 at 2% simple interest for 8 years.
(2) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 7 years.
(4) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(5) Calculate the amount due if Charles borrowed a sum of $3900 at 3% simple interest for 3 years.
(6) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6267.5 to clear it?
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.
(8) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(9) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(10) How much loan did Emily borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8437.5 to clear it?