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) If Karen paid $4424 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 7 years.
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 4 years.
(5) If Mark paid $5104 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?
(7) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(8) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?
(9) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.