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) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.
(2) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(3) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?
(4) What amount will be due after 2 years if John borrowed a sum of $3100 at a 10% simple interest?
(5) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(6) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(7) 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.
(8) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(9) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 7 years.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 8 years.