Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 7% simple interest?
Correct Answer
$4544
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 7% × 6
= $3200 ×7/100 × 6
= 3200 × 7 × 6/100
= 22400 × 6/100
= 134400/100
= $1344
Thus, Simple Interest = $1344
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 = $3200 + $1344
= $4544
Thus, Amount to be paid = $4544 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 = $3200
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 7% × 6)
= $3200 + ($3200 ×7/100 × 6)
= $3200 + (3200 × 7 × 6/100)
= $3200 + (22400 × 6/100)
= $3200 + (134400/100)
= $3200 + $1344 = $4544
Thus, Amount (A) to be paid = $4544 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 $3200, the simple interest in 1 year
= 7/100 × 3200
= 7 × 3200/100
= 22400/100 = $224
Thus, simple interest for 1 year = $224
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $224 × 6 = $1344
Thus, Simple Interest (SI) = $1344
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1344
= $4544
Thus, Amount to be paid = $4544 Answer
Similar Questions
(1) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 4% simple interest?
(2) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(3) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $12350 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if David borrowed a sum of $3200 at a 10% simple interest?
(5) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 7% simple interest for 7 years.
(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) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7252 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 4% simple interest?
(10) How much loan did James borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5750 to clear it?