Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?
Correct Answer
$4810
Solution And Explanation
Solution
Given,
Principal (P) = $3250
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) = $3250 × 8% × 6
= $3250 ×8/100 × 6
= 3250 × 8 × 6/100
= 26000 × 6/100
= 156000/100
= $1560
Thus, Simple Interest = $1560
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 = $3250 + $1560
= $4810
Thus, Amount to be paid = $4810 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 = $3250
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 8% × 6)
= $3250 + ($3250 ×8/100 × 6)
= $3250 + (3250 × 8 × 6/100)
= $3250 + (26000 × 6/100)
= $3250 + (156000/100)
= $3250 + $1560 = $4810
Thus, Amount (A) to be paid = $4810 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 $3250, the simple interest in 1 year
= 8/100 × 3250
= 8 × 3250/100
= 26000/100 = $260
Thus, simple interest for 1 year = $260
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $260 × 6 = $1560
Thus, Simple Interest (SI) = $1560
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1560
= $4810
Thus, Amount to be paid = $4810 Answer
Similar Questions
(1) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.
(2) If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 9% simple interest?
(4) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 5% simple interest?
(5) In how much time a principal of $3200 will amount to $3520 at a simple interest of 2% per annum?
(6) Kimberly had to pay $5068.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Ashley had to pay $5096 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.
(10) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7548 to clear the loan, then find the time period of the loan.