Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 8% simple interest?
Correct Answer
$4736
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 8% × 6
= $3200 ×8/100 × 6
= 3200 × 8 × 6/100
= 25600 × 6/100
= 153600/100
= $1536
Thus, Simple Interest = $1536
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 = $3200 + $1536
= $4736
Thus, Amount to be paid = $4736 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 = $3200
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 8% × 6)
= $3200 + ($3200 ×8/100 × 6)
= $3200 + (3200 × 8 × 6/100)
= $3200 + (25600 × 6/100)
= $3200 + (153600/100)
= $3200 + $1536 = $4736
Thus, Amount (A) to be paid = $4736 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 $3200, the simple interest in 1 year
= 8/100 × 3200
= 8 × 3200/100
= 25600/100 = $256
Thus, simple interest for 1 year = $256
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $256 × 6 = $1536
Thus, Simple Interest (SI) = $1536
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1536
= $4736
Thus, Amount to be paid = $4736 Answer
Similar Questions
(1) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(2) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(3) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(4) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.
(5) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?
(6) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 4% simple interest.
(7) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.
(8) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(9) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9834 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 8% simple interest?