Question:
What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?
Correct Answer
$4588
Solution And Explanation
Solution
Given,
Principal (P) = $3100
Rate of Simple Interest (SI) = 8%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3100 × 8% × 6
= $3100 ×8/100 × 6
= 3100 × 8 × 6/100
= 24800 × 6/100
= 148800/100
= $1488
Thus, Simple Interest = $1488
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 = $3100 + $1488
= $4588
Thus, Amount to be paid = $4588 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 = $3100
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3100 + ($3100 × 8% × 6)
= $3100 + ($3100 ×8/100 × 6)
= $3100 + (3100 × 8 × 6/100)
= $3100 + (24800 × 6/100)
= $3100 + (148800/100)
= $3100 + $1488 = $4588
Thus, Amount (A) to be paid = $4588 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3100, the simple interest in 1 year
= 8/100 × 3100
= 8 × 3100/100
= 24800/100 = $248
Thus, simple interest for 1 year = $248
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $248 × 6 = $1488
Thus, Simple Interest (SI) = $1488
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3100 + $1488
= $4588
Thus, Amount to be paid = $4588 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 3 years.
(3) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 4 years.
(4) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(5) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(6) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(7) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?
(8) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(10) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?