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) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 10% simple interest?
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.
(3) What amount does David have to pay after 5 years if he takes a loan of $3400 at 2% simple interest?
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 3 years.
(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 4 years.
(6) How much loan did Matthew borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7750 to clear it?
(7) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(9) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 8 years.
(10) How much loan did Sharon borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8912.5 to clear it?