Question:
What amount does William have to pay after 6 years if he takes a loan of $3500 at 8% simple interest?
Correct Answer
$5180
Solution And Explanation
Solution
Given,
Principal (P) = $3500
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) = $3500 × 8% × 6
= $3500 ×8/100 × 6
= 3500 × 8 × 6/100
= 28000 × 6/100
= 168000/100
= $1680
Thus, Simple Interest = $1680
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 = $3500 + $1680
= $5180
Thus, Amount to be paid = $5180 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 = $3500
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3500 + ($3500 × 8% × 6)
= $3500 + ($3500 ×8/100 × 6)
= $3500 + (3500 × 8 × 6/100)
= $3500 + (28000 × 6/100)
= $3500 + (168000/100)
= $3500 + $1680 = $5180
Thus, Amount (A) to be paid = $5180 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 $3500, the simple interest in 1 year
= 8/100 × 3500
= 8 × 3500/100
= 28000/100 = $280
Thus, simple interest for 1 year = $280
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $280 × 6 = $1680
Thus, Simple Interest (SI) = $1680
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $1680
= $5180
Thus, Amount to be paid = $5180 Answer
Similar Questions
(1) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 4% simple interest?
(2) If Patricia paid $3402 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 6% simple interest?
(4) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 3 years.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 8 years.
(7) In how much time a principal of $3050 will amount to $3294 at a simple interest of 4% per annum?
(8) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 9% simple interest?
(9) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 4 years.