Question:
What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 8% simple interest?
Correct Answer
$4662
Solution And Explanation
Solution
Given,
Principal (P) = $3150
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) = $3150 × 8% × 6
= $3150 ×8/100 × 6
= 3150 × 8 × 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 = $3150 + $1512
= $4662
Thus, Amount to be paid = $4662 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 = $3150
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3150 + ($3150 × 8% × 6)
= $3150 + ($3150 ×8/100 × 6)
= $3150 + (3150 × 8 × 6/100)
= $3150 + (25200 × 6/100)
= $3150 + (151200/100)
= $3150 + $1512 = $4662
Thus, Amount (A) to be paid = $4662 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 $3150, the simple interest in 1 year
= 8/100 × 3150
= 8 × 3150/100
= 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 = $3150 + $1512
= $4662
Thus, Amount to be paid = $4662 Answer
Similar Questions
(1) How much loan did James borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5500 to clear it?
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.
(3) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(4) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.
(5) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(6) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 6% simple interest?
(7) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 8 years.
(8) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 9% simple interest?
(9) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 6% simple interest?
(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 7 years.