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) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 7 years.
(2) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7040 to clear the loan, then find the time period of the loan.
(3) How much loan did Sandra borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8062.5 to clear it?
(4) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11041 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.
(6) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
(7) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(8) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(9) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(10) Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 3 years.