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) How much loan did Mark borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7040 to clear it?
(2) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?
(4) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 7 years.
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(9) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(10) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?