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) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.
(2) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(3) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.
(4) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8326 to clear the loan, then find the time period of the loan.
(5) 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.
(6) If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) How much loan did Jacob borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $10000 to clear it?
(8) Matthew had to pay $4704 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(10) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.