Question:
What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 8% simple interest?
Correct Answer
$5328
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 8% × 6
= $3600 ×8/100 × 6
= 3600 × 8 × 6/100
= 28800 × 6/100
= 172800/100
= $1728
Thus, Simple Interest = $1728
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 = $3600 + $1728
= $5328
Thus, Amount to be paid = $5328 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 = $3600
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3600 + ($3600 × 8% × 6)
= $3600 + ($3600 ×8/100 × 6)
= $3600 + (3600 × 8 × 6/100)
= $3600 + (28800 × 6/100)
= $3600 + (172800/100)
= $3600 + $1728 = $5328
Thus, Amount (A) to be paid = $5328 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 $3600, the simple interest in 1 year
= 8/100 × 3600
= 8 × 3600/100
= 28800/100 = $288
Thus, simple interest for 1 year = $288
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $288 × 6 = $1728
Thus, Simple Interest (SI) = $1728
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1728
= $5328
Thus, Amount to be paid = $5328 Answer
Similar Questions
(1) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.
(2) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 4 years.
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 4 years.
(5) Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 3 years.
(6) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(7) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(9) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.