Question:
What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 7% simple interest?
Correct Answer
$5112
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 7% × 6
= $3600 ×7/100 × 6
= 3600 × 7 × 6/100
= 25200 × 6/100
= 151200/100
= $1512
Thus, Simple Interest = $1512
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 + $1512
= $5112
Thus, Amount to be paid = $5112 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) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3600 + ($3600 × 7% × 6)
= $3600 + ($3600 ×7/100 × 6)
= $3600 + (3600 × 7 × 6/100)
= $3600 + (25200 × 6/100)
= $3600 + (151200/100)
= $3600 + $1512 = $5112
Thus, Amount (A) to be paid = $5112 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 $3600, the simple interest in 1 year
= 7/100 × 3600
= 7 × 3600/100
= 25200/100 = $252
Thus, simple interest for 1 year = $252
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $252 × 6 = $1512
Thus, Simple Interest (SI) = $1512
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1512
= $5112
Thus, Amount to be paid = $5112 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(2) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9562.5 to clear it?
(3) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 2% simple interest?
(4) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7964 to clear the loan, then find the time period of the loan.
(5) How much loan did Deborah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9312.5 to clear it?
(6) If Emily paid $5510 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 8% simple interest?
(8) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10679 to clear the loan, then find the time period of the loan.
(10) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 3% simple interest?